ENI East Regional Action Programme 2016 and 2017, Part I, to be financed from the general budget of the European Union

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1 SUMMARY ENI East Regional Action Programme 2016 and 2017, Part I, to be financed from the general budget of the European Union 1. IDENTIFICATION Budget line / / Total cost Legal basis EUR of EU contribution: - EUR from the general budget of the EU for EUR from the general budget of EU for 2017, subject to the availability of appropriations following the adoption of the relevant budget Analytical breakdown: - EUR on Maritime safety, security and marine environmental protection in the Black and Caspian Sea Regions - EUR on EaP IBM Flagship Initiative: introduction of an automated intelligent video-control system at road border crossing point Novaya Huta Novi Yarylovychi at the Belarus-Ukraine frontier - EUR on ENI East Global Allocation EUR on EaP IBM Flagship Initiative: enhanced integrated border management through joint border control and exchange of information along the Moldovan-Ukraine border - EUR on Integrating SMEs from the EaP countries into domestic and global value chains - EUR (EUR EUR ) on EU4Youth Regulation (EU) No 232/2014 of the European Parliament and of the Council of 11 March 2014 establishing a European Neighbourhood Instrument (ENI) 2. REGIONAL BACKGROUND The EaP countries are faced with revitalising and diversifying their economies while maintaining fiscal and macroeconomic stability. Most countries are faced with security issues either on their borders or inside the country. The EU regional approach for assisting these countries can increase confidence among them and promote security, stability, and prosperity in the region. 3. SUMMARY OF THE ACTION PROGRAMME The EU policy responses to the challenges of the ENI East region are guided by the European Neighbourhood Policy, including the EaP and the bilateral relations between the EU and each of these countries. With a total allocation of EUR , the ENI East Regional Action Programme (RAP) 2016 and 2017, Part I will address: 1

2 1. The action "Maritime safety, security and marine environmental protection in the Black and Caspian Sea Regions" supports beneficiary countries in acceding/implementing the relevant international legislation. 2. The action "EaP IBM Flagship Initiative: introduction of an automated intelligent video-control system at road border crossing point Novaya Huta Novi Yarylovychi at the Belarus-Ukraine frontier" entails the procurement of an automated video control system. 3. The "ENI East Global Allocation 2016" is a Support Measure for the project cycle management in the EaP countries. 4. The action "EaP IBM Flagship Initiative: enhanced integrated border management through joint border control and exchange of information along the Moldovan- Ukraine border enhances IBM between Moldova and Ukraine. 5. The action "Integrating SMEs from the EaP countries into domestic and global value chains" supports EaP countries SMEs' integration into domestic and global value chains and access to new markets. 6. The action "EU4Youth programme" aims to foster the active participation of young people in society and their employability in the economy by developing those skills that can support them in becoming leaders and entrepreneurs. 3.1 Neighbourhood-related policy of partner countries The ENI-East Global Allocation does not by its supporting nature correspond to any particular policies in the countries. 3.2 Consistency with the programming documents: The RAP 2016 is in line with the ENI East Regional Strategy Paper, the 2015 ENP Review and the Indicative Programme , and Article 7 of the ENI Regulation. RAP 2016 proposed actions are foreseen in the framework of the Regional Indicative Programme Action Priority area Ref. multiannual indicative programme Action 1 Transport Action 2 Border Management Action 3 Support Measure 7.4 Action 4 Border Management Action 5 Economic development Action 6 Youth Identified actions and expected results Action 1: Results: (a) improved maritime safety and ships'/ports' security; (b) reduced marine pollution; (c) improved qualification of seafarers; (d) improved living and working conditions on ships. Action 2: 2

3 Results: (a) time reduction for custom formalities; (b) enhanced capacities to prevent/fight cross-border crimes; (c) reduced attempts of goods' smuggling; (d) improved conditions for free movement of persons/goods/means of transport; (e) environmental situation improved. Action 3: Results: (a) identification, formulation, monitoring and follow-up of projects; small-scale activities to back up major projects; (b) information and communication activities. Action 4: Result: necessary equipment is identified, procured, tested and in use for all the activities of Action 4. Action 5: Results: (a) roadmap developed in each country; (b) strengthened capacities of SMEs and sectoral business support organisations; (c) business linkages created for SMEs. Action 6: Results: (a) youth is empowered with key competences and skills and their educational and employment opportunities are increased; (c) effective functioning, coordination, visibility and monitoring of the programme are ensured. 3.4 Past EU assistance and lessons learnt Regional activities should support initiatives backed by political willingness or fostering political commitment where there is none. Support from the partner countries' institutions is needed to reach the projects' objectives. Countries' preferences must be taken into account. Action 1: This action builds on previous similar EU support actions in this field. Action 2: This action builds on previous similar EU support actions in this field. Action 3: This has proven to be a useful tool for small-scale supporting activities requiring a flexible approach. Action 4: This action builds on previous similar EU support actions in this field. Action 5 This action builds on previous similar EU support actions in this field. Action 6: This programme builds on the EaP Youth Window, on key recommendations resulting from the 2 nd EaP Youth Forum, and on the findings of the EaP Youth Regional Unit. 3.5 Complementary actions/donor coordination Activities will be coordinated with other EU-funded activities and with other donors' activities. Project implementation is also reported to the EaP platforms and panels. All regional programmes are approved by the ENI Committee before their adoption by the European Commission. 3

4 4. COMMUNICATION AND VISIBILITY Communication and information activities are an integral part of the support measure ENI- East Global Allocation. Each specific project shall also have its own communication component elaborated in line with the Communication and Visibility Manual for EU External Action1. 5. COST AND FINANCING The total costs of the action programme is EUR , of which EUR from the general budget of 2016 and EUR from the general budget of 2017 subject to the availability of appropriations following the adoption of the relevant budget. Action Action 1 - Budget line: Action 2 - Budget line: Action 3 - Budget line: Action 4 - Budget line: Action 5 - Budget line: EUR Action 6 - Budget line: (2016: : ) Total Amount RAP (2016: : ) The Committee is invited to give its opinion on the attached ENI East RAP

5 This action is funded by the European Union ANNEX 1 of the Commission Implementing Decision on the ENI East Regional Action Programme 2016 and 2017, Part I Action Document for 'Maritime safety, security and marine environmental protection in the Black and Caspian Sea Regions' INFORMATION FOR POTENTIAL GRANT APPLICANTS WORK PROGRAMME FOR GRANTS This document constitutes the work programme for grants in the sense of Article 128(1) of the Financial Regulation (Regulation (EU, Euratom) No 966/2012 in section for grants awarded directly without a call for proposals 1. Title/basic act/ CRIS number 2. Zone benefiting from the action/location 3. Programming document 'Maritime safety, security and marine environmental protection in the Black and Caspian Sea Regions' CRIS number: ENI/2016/ financed under the European Neighbourhood Instrument (ENI) Black and Caspian Sea Regions. Beneficiary countries are: Azerbaijan, Georgia, Iran, Kazakhstan, Republic of Moldova 1, Ukraine, Turkey and Turkmenistan. ENI Regional East Strategy Paper ( ) and Multiannual Indicative Programme ( ) 4. Sectors Maritime transport and marine environment 5. Amounts concerned 6. Aid and implementation modality Total estimated cost: EUR Total amount of EU budget contribution: EUR Project Modality Direct management Grant direct award 1 Hereinafter referred to as Moldova. 1

6 7. DAC code(s) Transport policy and administratie management Biosphere protection 8. Markers (from CRIS DAC form) General policy objective Not targeted Significant objective Main objective Participation development/good governance Aid to environment Gender equality (including Women In Development) Trade Development Reproductive, Maternal, New born and child health RIO Convention markers Not targeted Significant objective Main objective Biological diversity Combat desertification Climate change mitigation Climate change adaptation SUMMARY The objective of the project is to further improve maritime safety and security and to increase the levels of marine pollution prevention, preparedness and response in the region. This will be primarily achieved by supporting the ongoing efforts of the beneficiary countries in acceding to and implementing the relevant international legislation, approximation of their regulatory frameworks with the EU legislation and improving the performance of their maritime activities. The project shall cover all three typical areas of responsibility - Flag State, Port State and Coastal State. The focus is on the Black Sea. Turkey, not being an ENI-country, has been added as a beneficiary country to ensure that all Black Sea littoral States that have concluded association agreements with the EU are jointly and equally supported in the area of maritime safety, security and environmental protection. Azerbaijan, as a member of the Eastern Partnership, is taken on board as a beneficiary and will benefit from the capacity building component of the project, on a needs basis, and when requested. Iran, Kazakhstan and Turkmenistan are also eligible to some activities on a needs basis, and when requested. This project is nested under the Black Sea Synergy as the main focus is on the Black Sea maritime transport and maritime environment and will contribute to the objective defined in its January 2015 implementation report. Beneficiary countries will be provided with technical knowledge of the relevant international instruments. This shall help to gradually mitigate the existing imbalance between the EU countries and the beneficiaries in the application of the maritime legislation. They will also be provided with operational support through the provision of EMSA services: CleanSeaNet as part of the European Maritime Safety Agency (EMSA) Integrated Maritime Data Environment (IMDatE), RuleCheck, MaCKs and THETIS EU. The availability of these services will on one side increase the capacity of the beneficiary countries 2

7 to implement the newly adopted/amended harmonised legislation and on the other will maintain their interest and motivation to continue the reforms high. In the context of the activities on vessel traffic monitoring, provision will be made for providing, if the need appears, the beneficiaries with additional infrastructure (Automatic Identification Systems (AIS) stations). The project contributes to achieving the objectives, as concerns the transport sector, of the Eastern Partnership (EaP) as defined at the last EaP-Summit in Riga (May 2015), and more in particular of making transport links between the EU and Eastern European partners safer and more efficient. 1.1 Sector context Maritime safety Safety of ships and their safe operation are primarily regulated in a number of international conventions, mainly but not only under the International Maritime Organisation (IMO). When acceding to such instruments States assume the primary responsibility to have in place an adequate and effective system to exercise control over ships entitled to fly their flag, and to ensure that they comply with relevant international rules and regulations in respect of maritime safety, security and protection of the marine environment, (flag State implementation, a function which is normally under the jurisdiction of national maritime authorities). In recent years, the EU and its Member States have been at the forefront of improving maritime safety legislation and promoting high-quality standards in their capacity as Flag States. To this end the EU and its Member States were actively involved in the international domain in the development of the Code for the Implementation of Mandatory IMO Instruments and the relevant audit scheme, while within the context of the European Union the EU Member States have ensured that they effectively and consistently discharge their obligations as flag States; and enhanced safety and prevention of pollution from ships flying their flag (with a series of Directives and Regulations, known as the Third Maritime Safety Package and in particular Directive 2009/21/EC). The aim is to eliminate substandard shipping, increase the protection of passengers and crews, improve living and working conditions, reduce the risk of environmental pollution, and ensure that operators who follow good practices are not put at a commercial disadvantage compared to those who are prepared to take short cuts with vessel safety. Equally important and with great influence to maritime safety is the implementation of the Maritime Labour Convention (MLC), adopted by the International Labour Organisation (ILO) in 2006, which also addresses flag State-related obligations. In the area of flag State the beneficiary s performance varies from white to black list. Furthermore and even if the beneficiaries are parties to the vast majority of the international instruments, it is not confirmed if they have transposed in their national legislation the international instruments in their up-to-date version. The EU approach is that international standards must be rigorously upheld, but a number of flag States are failing to implement their obligations as foreseen by the international instruments. The obstacles met by some flag States to effectively implement these obligations 3

8 foreseen by the international instruments, led the EU to reinforce its Port state control (PSC) regime (Directive 2009/16/EC as amended). Port State control is a second line of defence against those flag States that are unable to fulfil their obligations under the international maritime conventions. Port States have the right (for the EU Member States is an obligation deriving from Directive 2009/16/EC) to inspect foreign vessels calling at their ports in order to verify compliance with such conventions. Regional agreements based on voluntary agreements (Memoranda of Understanding on PSC) have been established in order to perform the Port State Control on the basis of harmonised procedures aiming at enhancing the activity's effectiveness and prevent any distortion to the market that could arise as a consequence of the application of disharmonised rules. The Paris Memorandum of Understanding (Paris MoU) and the Tokyo MoU are the most advanced MoUs in relation to well established harmonised rules and procedures. EU efforts have proven that PSC can be an effective tool to fight sub-standard shipping as well as to measure the performance of flag States. In the EU domain, EMSA has developed and is hosting the relevant inspection database (THETIS) through which and on the basis of predefined legal requirements ships are selected for inspection and the results of PSC inspections are appropriately recorded. In the area of PSC the beneficiaries can be divided in two groups those who are members of a regional agreement, in this case the Black Sea Memorandum on PSC (BSMoU) - and those who are not members to any harmonised regime (Moldova and the Caspian Sea littoral States). In the domain of coastal obligations and of safety of navigation, Vessel Traffic Services (VTS) or Vessel Traffic Monitoring and Information Systems (VTMIS) allow identification and monitoring of vessels and create an overall picture of the movement of vessels in certain maritime areas, and thus enable the authorities of the coastal states to monitor and manage the traffic, as well as to forecast and prevent potential incidents, and as a last resort to better respond in case of accidents and incidents at sea in view of minimising the loss of life and property and damage to the marine environment. The monitoring systems can be based on short range identification transponders (i.e. Automatic Identification Systems (AIS)), but may also incorporate, at a later stage, a Long Range Identification and Tracking (LRIT) component for the entire regions. The EU has established a Community VTMIS that introduces obligations, procedures and other requirements for ships sailing in the EU waters. The basis of the EU VTMIS is the SafeSeaNet (SSN). The main objective of SSN is to provide a European Platform for Maritime Data Exchange between maritime administrations of the Member States, by settingup a telematic network between all the maritime EU Member States for their co-operation in preventing maritime pollution and accidents at sea. EMSA is responsible for the development, operation and maintenance of the SSN and interacts with users on an operational basis. A pre-requisite of the deployment of any regional system, is the availability of adequate infrastructure (i.e. alerting posts and coastal stations, traffic and search and rescue coordination centres) as well as the implementation of coastal and port VTSs supported by sufficient AIS shore based infrastructure and manned by competent and trained personnel Maritime Security The International Ship and Port facility Security (ISPS) Code was adopted in 2002 and became mandatory on the 1st July 2004 through the inclusion in the International Convention for Safety of the Life at Sea (SOLAS). The Code aims to provide a standardised and 4

9 consistent framework for evaluating risk, enabling Governments to offset changes in threat with changes in vulnerability for ships and port facilities through the determination of appropriate security levels and corresponding security measures. The project s beneficiaries are all parties to the SOLAS Convention and therefore are said to implement in full the International Ship and Port Facility Security Code (ISPS) for what concerns the mandatory standards of Part A both for ships and port facilities with the help of the guidance provided in the Part B of the said Code. There is a tight relation between the level of knowledge, the capability of the management, the resources available and the performance of a maritime administration (for ships) and of a Designated Authority (for port facilities). Taking that into account this activity aims to get the full implementation of the mandatory SOLAS maritime security requirements together with a progressive alignment with the European Union standards as laid down in the Regulation (EC) no 725/2004 of the European Parliament and of the Council of 31 March 2004 on enhancing ship and port facility security, in the Directive 2005/65/EC of the European Parliament and of the Council of 26 October 2005on enhancing port security as well as with the Commission Recommendation of 11 March 2010 on measures for self-protection and the prevention of piracy and armed robbery against ships Prevention of pollution caused by ships The Black Sea has a very sensitive and fragile environment that requires special measures and rigid environmental control. This is further exacerbated by the heavy traffic of ships carrying oil and the oil off-shore industry. A potential incident will have long-term and irreversible negative effects on the environment as well as on the coastal economies of the littoral states. Acknowledging this, the Black Sea has been designated as special area under Annex I (Prevention of pollution by oil) and Annex V (Prevention of pollution by garbage from ships) of the International Convention for the Prevention of Pollution from Ships (MARPOL). In special areas more stringent anti-pollution requirements apply in order to ensure higher level of protection than other areas of the sea. The lack of notifications from the coastal states on the existence of adequate reception facilities has been an obstacle for the entry into force of the requirements for the Black Sea special area under Annex V. As far as the air emissions are concerned and Annex VI (Regulations for the Prevention of Air Pollution from Ships and the NOx Technical Code), it should be noted that still two coastal states have not yet ratified it. In addition, and with respect to the content of Sulphur in fuel oils, two littoral states are EU Member States thus bound by Directive 1999/32/EC as amended. In this respect actions should be envisaged to align the legislation of the beneficiaries to the stricter Sulphur Limits foreseen in the EU as well as their incorporation to the harmonised system for inspections and fuel sampling, facilitating the use of the inspection database THETIS EU developed and hosted by EMSA, thus ensuring the same level of control throughout the area. The Black Sea is also very vulnerable to alien species introduced with ballast water. Despite this, only 3 of the 6 littoral States have ratified the Ballast Water Management Convention. Besides the universally applicable international instruments, there is a regional convention, namely the Convention on the Protection of the Black Sea against Pollution (Bucharest Convention), aimed at the prevention of marine pollution by ships in the Black Sea. The Convention has the basic objective to substantiate the general obligation of the Contracting Parties to prevent, reduce and control the pollution in the Black Sea in order to protect and preserve the marine environment and to provide the legal framework for cooperation and concerted actions to fulfil this obligation. Georgia, Turkey and Ukraine are parties to the Convention. 5

10 1.2 Public Policy Assessment and EU Policy Framework Eastern Partnership Representing the Eastern dimension of the European Neighbourhood Policy (ENP), this initiative was launched in It aims to deepen and strengthen relations between the EU and its six Eastern neighbours, Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine. The main objective is to support political and socio-economic reforms in partner countries to: Foster political association and further economic integration Support mobility of citizens and visa liberalisation as a long term goal Enhance sector cooperation Support civil society The ENP is currently under review. Four important dimensions constitute the backbone of this review: differentiation, focus, flexibility, ownership & visibility. Interconnectivity is high on the agenda of the Eastern Partnership process, as confirmed at the latest Summit (Riga, May 2015). In the area of transport, the Summit participants stressed the importance of making transport links between the EU and Eastern European partners safer and more efficient, and of supporting the improvement of logistics systems, including motorways of the sea EU Association Agreements Georgia, Moldova and Ukraine have signed Association Agreements with the EU. Turkey has signed in 2008 an Accession Partnership based on the pre-accession strategy which is the main instrument providing guidance in the preparation for its accession. On the basis of such agreements the four beneficiaries, differently from others, are bound to implement the EU maritime acquis and meet the EU standards in the field of maritime safety, maritime security and prevention of, preparedness and response to marine pollution. In the framework of the project it will be of utmost importance to support the countries in achieving their objective in close coordination with the relevant services of the European Commission and in cooperation with other EU funded projects aiming to provide specific support for the transposition of the EU standards into national legislations. Main priorities with regard to the implementation of the Association Agreements will be supporting relevant beneficiaries with the implementation of the EU Marine Strategy Framework Directive (2008/56/EC) and providing support to Moldova to bring in necessary reforms to be removed from the Black List of the Paris MoU Black Sea Synergy This initiative, initiated in 2008, is designed as a flexible framework to ensure greater coherence and policy guidance, while also inviting a more integrated approach and closer regional ties in order to: Stimulate democratic and economic reforms; Support stability and promote development; Facilitate practical projects in areas of common concern; Open up opportunities and challenges through coordinated action in a regional framework; Encourage the peaceful resolution of conflicts in the region. 6

11 Under the Synergy, three sectoral partnerships were established: environment, transport and energy A strategy for the Black Sea The EU Parliament adopted a resolution in 2011 for an EU Strategy for the Black Sea Region to be launched. The main objective is to establish an area of peace, democracy, prosperity and stability founded on respect for human rights and fundamental freedoms and providing for EU energy security. It considered that good governance, the rule of law, promotion of respect for human rights, migration management, energy, transport, the environment and economic and social development should constitute priority actions Blue Growth Strategy The Blue Growth communication adopted in 2012 is the maritime strand of the Europe 2020 strategy and an update of the Integrated Maritime Policy. This strategy consists of three components: Targeted effort towards specific activities (focus areas) identified as being the most promising sectors for growth development: coastal tourism, blue energy, aquaculture, blue biotechnology and marine minerals mining. Cross-cutting tools which are specific, policy integrated measures across sectors including Maritime Spatial Planning, Integrated Coastal Management, Marine Knowledge 2020 initiative and maritime surveillance. Sea-basin strategies. Other aspects that are crucial for a sustainable growth in the blue economy are the development of the appropriate skills, marine and maritime research and access to finance. The Commission extended the dialogue on sustainable development of the blue economy of the Black Sea to all Black Sea countries through the annual stakeholder conferences held in Bucharest, Romania (2014) and Sofia, Bulgaria (2015). The proposed action supports attaining the objectives of the ENP and the other strategy papers above as regards maritime safety, security and marine environmental protection and is in line with the priorities set thereby. 1.3 Stakeholder analysis Several regional organisations are involved in policy formulation or implementation in the fields of maritime safety, security and marine environment. On country level, the project's main stakeholders are the ministries of transport, maritime administrations and authorities, port authorities and maritime academies. Indirectly, the shipping companies in the region could also benefit from the project International and regional organisations The International Maritime Organisation (IMO) is the specialised agency of the United Nations setting the global standards for the safety, security and environmental performance of international shipping. Its main role is to create a regulatory framework for the shipping industry that is fair and effective, universally adopted and universally implemented. At the occasion of their regular meetings the different bodies of the Organization Assembly, Committees, Sub-Committees, Working and Correspondence Groups ensure the 7

12 coordination on maritime safety, security and environmental protection is generally ensured by IMO. All project s beneficiaries are parties to the IMO Convention and they have ratified most of the international conventions in the field of maritime safety and marine pollution prevention. The International Labour Organisation (ILO) is devoted to promoting social justice and internationally recognized human and labour rights, pursuing its founding mission that social justice is essential to universal and lasting peace. The ILO has four strategic objectives: Promote and realize standards and fundamental principles and rights at work. Create greater opportunities for women and men to decent employment and income. Enhance the coverage and effectiveness of social protection for all. Strengthen tripartism and social dialogue. In support of its goals, the ILO offers unmatched expertise and knowledge about the world of work, acquired over more than 90 years of responding to the needs of people everywhere for decent work, livelihoods and dignity. It serves its tripartite constituents - and society as a whole - in a variety of ways, including formulation of international policies and programmes to promote basic human rights, improve working and living conditions, and enhance employment opportunities as well as creation of international labour standards backed by a unique system to supervise their application. ILO is active in the field of maritime labour since 1920 with a significant number of international conventions, the standards of which have been transposed into the Maritime Labour Convention, The Convention entered into force on 20 August 2013 and together with the IMO SOLAS, MARPOL and STCW conventions is considered the fourth pillar of maritime safety. The Black Sea Memorandum of Understanding on Port State Control (BSMoU) is the regional agreement which is active in the region and has a Secretariat based in Turkey. Three of the project s beneficiaries (Georgia, Ukraine and Turkey) are members of the agreement and Azerbaijan has an observer status. Good working relationship has been established between EMSA and the BS MoU Secretariat in the course of the TRACECA Maritime Safety and Security II complementary project implemented by EMSA. It was the main channel for provision of assistance to the beneficiary countries in the area of PSC (provision of RuleCheck and Distance Learning Package, development of a mandatory training scheme for PSC Officers and highly specialized training courses for PSC Officers). The Secretariat also provided EMSA with information and documents (PSC procedures) which were needed to deliver the outputs of the PSC component of the project. In the framework of the proposed action the BS MoU Secretariat will continue to play this role. The Commission on the Protection of the Black Sea Against Pollution (or the Black Sea Commission (BSC)) via its Permanent Secretariat is the intergovernmental body established for implementation of the Convention on the Protection of the Black Sea Against Pollution (Bucharest Convention), its Protocols and the Strategic Action Plan for the Environmental Protection and Rehabilitation of the Black Sea (latest version adopted in 2009). BSC possesses cooperation links and options for consultative conversation with other 8

13 intergovernmental organisations involved in marine pollution affairs at the global and regional level, including the United Nations Environment Programme (UNEP), IMO, Global Environmental Facility (GEF), International Commission for the Protection of the Danube River (ICPDR), Agreement on the Conservation of Cetaceans of the Black Sea, Mediterranean Sea and Contiguous Atlantic Area (ACCOBAMS), Organisation of the Black Sea Economic Cooperation (BSEC), European Environment Agency (EEA), and different other institutions of the EU. The resources allocated to BSC as an organisation are very limited, and the organisation is not allowed to exceed the scope of the Bucharest Convention. Hence the record of BSC s direct actions is limited. The structure is dependent on projects externally funded by e.g. UNDP and EU. At the same time, BSC remains a key regional partner for the protection of the marine and coastal environment in the Black Sea and will be involved, as appropriate, in the activities of this project which are related to marine pollution (including marine litter), also contributing to more efficient coordination and use of EU funding for marine environment protection in the region. The only Black Sea regional maritime stakeholders forum is the Black Sea Stakeholders Conference chaired by the European Commission. It convened in Romania in 2014 and in Bulgaria in The Conference of Peripheral Maritime Regions (CPMR) also has a Commission on the Black Sea, yet not very active Beneficiary countries The project's beneficiary countries differ greatly in several domains. Development of their maritime sectors (fleet size and composition, maritime traffic, ports). 75% of the beneficiary countries tonnage flies Turkish flag. The fleets are generally small, jointly accounting to 0.8 % of the world tonnage. Maturity of their maritime administrations (availability and quality of structures, staff, operational procedures). Comprehensiveness of the maritime legislation (status of ratification of international instruments and availability on implementing national legislation). All project beneficiaries are parties to the main instruments although in some cases not to their most up-to-date versions. There is great difference in the rate of accessions from country to country (Moldova and Azerbaijan being party to a considerable less number in comparison with Ukraine and Georgia). This requires further effort in incentivising the beneficiary countries to ratify the international conventions. A table with an overview per beneficiary country of the conventions ratified is attached in annex II. Flag State performance under the Paris MoU. Not all countries are listed in the Paris MoU due to lack of data (minimum number of inspections per year, e.g. Azerbaijan whose fleet operates only in the land-locked Caspian Sea). Ukraine is on the Grey list, Moldova is on the Black list (under-performing) while Turkey and Kazakhstan are on the Paris MoU White list. General institutional setting (mandate of maritime administrations, operational independence, budget allocations and support from central government for reform, legislation, etc.). 9

14 Safety of navigation. Some countries have fully implemented AIS (Turkey, Ukraine and Azerbaijan). Others have only limited AIS infrastructure in some areas (Georgia, Kazakhstan and Turkmenistan). This situation requires a differentiated approach to each beneficiary as well as a significantly different scope of assistance (in terms of volume, time and type) if the aim to attain a comprehensive level of maritime safety, security and environmental protection in the whole region is to be achieved. Azerbaijan is party to and it is implementing the main IMO conventions, in some cases not to their most up-to-date versions. The significant traffic of oil in its territorial waters and the sensitive environment of the Caspian Sea suggest the accession to the specific IMO instruments in that area (Convention Relating to Intervention on the High Seas in Cases of Oil Pollution Casualties (INTERVENTION), Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage (FUND), Convention on Limitation of Liability for Maritime Claims (LLMC), Protocol on Preparedness, Response and Cooperation to Pollution Incidents by Hazardous and Noxious Substances (OPRC-HNS), Convention on the Control of Harmful Anti-fouling Systems in Ships (AFS) and Ballast Water Management Convention (BWM)). The country performs flag State, port State and coastal State functions. The country is not listed in the Paris MoU flag State performance lists due to lack of data/inspection missions. Azerbaijan has an observer status in the BS MoU. The country has established a well-functioning maritime administration. Azerbaijan has been and currently is a beneficiary of twinning projects with Spain (Spanish General Directorate of Maritime Affairs). Georgia is party to the majority of IMO conventions, in some cases not to their most up-todate versions. The country performs flag State, port State and coastal State functions. Currently Georgia appears on the Paris MoU Grey list where it moved from the Black list following a large-scale quality initiative (which also resulted in a drastic decrease of its fleet). PSC is performed within the framework of the BS MoU. The system set up by Georgia for education of seafarers according the STCW convention has been recognised by the European Commission within the meaning of Directive 2008/106/EC, as amended and this allows seafarers of all nationalities trained and certified by Georgia to serve on board ships flying the flag of an EU Member State. The country has established a well-functioning maritime administration. Iran is party to the majority of IMO conventions, in some cases not to their most up-to-date versions. The country performs flag State, port State and coastal State functions. Currently Iran appears on the Paris MoU White list with an excess factor of -0,90. The country is also in the IMO White list for the STCW convention. The system set up by Iran for education of seafarers according the STCW convention has also been recognised by the European Commission within the meaning of Directive 2008/106/EC, as amended and this allows seafarers of all nationalities trained and certified by Iran to serve on board ships flying the flag of an EU Member State. Kazakhstan is a Caspian Sea littoral State. The country is party to the main IMO conventions since 1994 but not to UNCLOS. The fleet of Kazakhstan is closely related to the oil industry. Currently it comprises of 104 ships, 65% of which are oil tankers. Kazakhstan appears on the 2015 and 2014 White lists of the Paris MoU. In 2012 and 2013 it was on the Grey list of the Memorandum. In 2014 Kazakhstan embarked on a large-scale governmental reform including 10

15 in the maritime field. The country will need a lot of support in order to establish efficient flag State, port State and coastal State institutions. Moldova, as a land-locked country, has access to the Black Sea via the Danube. It has only one port which is open to both maritime and inland navigation vessels. The country is party to the main IMO conventions since 2005 and maintains a ship register since The main maritime function of Moldova is as flag State and as such it is underperforming (appears in the Paris MoU Black list). The port waste collection as well as the inspection of ships is falling behind the standards. A new law on Inland Naval Transport is drafted. Turkey is a contracting party to all major international maritime and environmental conventions. The only exception is the UN Convention on the Law of the Seas (UNCLOS). Turkey is a party of both the Barcelona and Bucharest Conventions. This could provide opportunities to Turkey for carrying experiences from the Barcelona system to the Black Sea. Priorities in the area of maritime transport indicated in the revised Turkey Accession Partnership of 2007 relate to the need to continue the alignment and the implementation in the sector (especially as regards pollution prevention) and to further strengthen the maritime administration. Since then Turkey moved to the White list of the Paris MoU (in 2008), became party to the most important IMO conventions in the area of maritime safety, security and environmental protection and successfully completed an audit under the Voluntary IMO Member State Audit Scheme (VIMSAS) resulting in minor findings. Further efforts are needed to align with the acquis and to strengthen institutional capacity. Work is still needed in the area of reporting formalities for ships. The system set up by Turkey for education of seafarers according the STCW convention has been recognised by the European Commission within the meaning of Directive 2008/106/EC, as amended and this allows seafarers of all nationalities trained and certified by Turkey to serve on board ships flying the flag of an EU Member State. Turkmenistan is a Caspian Sea littoral State. The country is party to some of the most important IMO conventions (not to their most up-to date versions, except for the Convention for the Prevention of Pollution from Ships (MARPOL)) since There are currently 63 ships under its flag. The fleet is closely related to the oil industry, 45% of the ships are oil tankers and another 45% are engaged in the offshore industry. The fleet operates only in the Caspian Sea. Ukraine has long traditions in maritime transport, a well-developed maritime sector, many international ports and is a maritime labour-supplying country. It is party to the major IMO instruments. The country is also a member of the BS MoU. The system set up by Ukraine for education of seafarers according the STCW convention has been recognised by the European Commission within the meaning of Directive 2008/106/EC, as amended and this allows seafarers of all nationalities trained and certified by Ukraine to serve on board ships flying the flag of an EU Member State. 1.4 Results of existing projects Since 2009 the EU has been continuously supporting the countries of the Neighbourhood East and Central Asian regions in their efforts to improve maritime safety, security and environmental protection through various projects. The adoption of the TRACECA Regional Action Strategy (TRAS) in 2011 was a major achievement of the first EU funded project in the area ('Development of common security management, maritime safety and ship pollution prevention for the Black Sea and Caspian Sea' (SASEPOL). To support the countries in 11

16 implementing the TRAS, the project 'TRACECA Maritime Safety and Security II' was initiated in 2013, complemented with activities directly implemented by EMSA since mid The objective of both projects is to ensure that beneficiary countries continue to implement the measures of the TRAS and to improve their performance as Flag, Port and Coastal States. The maritime authorities of the beneficiary countries were also provided with access to some operational tools developed at EU level in order to enhance their capacity to fulfil the obligations stemming from international conventions and to monitor and respond to accidental and deliberate pollution. Since the beginning of the projects, contacts have been established with all beneficiaries and the relationship has constantly improved. The positive effects of the technical actions on the beneficiaries can be reflected in the Flag State performance of those appearing on the Paris MoU list. Concrete results up until now of the 'TRACECA Maritime Safety and Security II'-project (01/ /2016), implemented by a private consortium led by NTU, are: Flag State implementation: Preparation of the beneficiaries to the IMO Member State Audit Scheme (IMSAS). Georgia successfully passed the audit, Azerbaijan and Kazakhstan have been extensively prepared, and work with Ukraine has begun. Advice to Kazakhstan on a reform of the structure of their maritime administration. Support to reform in Ukraine is on-going. Advice has already been provided on the basic structure and duties of a maritime administration. Protection of the marine environment: Awareness rising on the complex rules of the current IMO Conventions and EU regulations, and provision of information on State s duties. A specific effort has been carried out in Ukraine for the reform of the Port Waste Management Plan, in order to ensure compliance with EU Directive 2000/59. Joint work with the Black Sea Commission on Mobile Offshore platforms legislation. Field missions, e.g. on the International Maritime Dangerous Goods Code (IMDG), have allowed to provide tailored advice and recommendations. Human element: Promotion of and preparing for the ratification of the ILO MLC. Security of ships and ports: Training provided for administrative and port officers, to o improve knowledge of the ISPS implementation in ports (facilities and ports) o improve skills to work out assessments and plans as well as their approval o improve skills to be able to teach the port executives in order to manage the security training of port personnel at different levels (train the trainer). Concrete results up until now of the complementary project (06/ /2016), implemented by EMSA, are: Provision of access to RuleCheck and to the Distant Learning Package (DLP) for PSC Officers of the BSMoU members and project beneficiaries. RuleCheck and the DLP are tools originally developed by EMSA on behalf of the European Commission and the EU Member States to assist PSC Officers during PSC inspections and to improve their qualification. Lately the two tools have been further enhanced to cater the needs of several end users communities. 12

17 Provision of CleanSeaNet (CSN) service through EMSA s IMDatE to coastal beneficiary States. CSN is the European oil spill monitoring and vessel detection service (based on SAT-AIS information), which was set up to support EU Member States actions to combat deliberate or accidental pollution in the marine environment. Other regional and bilateral, including twinning, EU-funded projects that have been implemented in the field of maritime transport and marine environmental protection are: The MONINFO regional projects 2 (Environmental Monitoring of the Black Sea Basin: Monitoring and Information Systems for Reducing Oil Pollution) (EU-funded projects implemented by the Black Sea Commission) stimulated regional cooperation of maritime authorities of the six Black Sea countries, in particular concerning oil pollution from ships. At the same time they revealed the need for more efficient regional mechanisms (including AIS) for information exchange and monitoring of ship traffic to support marine and coastal environment protection. The project contributed to the development of a regional system against oil pollution from ships in the Black sea which will support the implementation of the Marine Strategy Framework Directive. Azerbaijan finished in 2014 a bi-lateral twinning project aimed at aligning Azerbaijan s national legislation on maritime safety, security and marine environmental protection with the short-term priorities of the EU-National Indicative Programme (NIP) for Azerbaijan and at strengthening the capacity of the State Maritime Administration (SMA) of Azerbaijan to transpose and implement the provisions of the relevant EU acquis and IMO Conventions. The project resulted in improved legislative framework in line with ratified IMO conventions and relevant EU-Directives. A new maritime transport strategy and national action plan on maritime safety, security and protection of marine environment for the period were prepared. As a result of the twinning project, the Azerbaijani Merchant Shipping Code and Administration Offences Code were amended and the new Law on Seaports" was adopted. The TRACECA Regional Action Strategy contains a bulk quantity of measures designed to achieve the key priorities identified in the Neighbourhood Transport Action Plan in the area of maritime and inland waterway transport until Although a lot of work has been done in the framework of the above described projects they could not cover all measures of the Strategy and therefore there is a need for follow-up technical actions leading to further improvements. These are described in detail in the section 1.5 below as well as in part 4 Description of the Action. 1.5 Priority areas for support/problem analysis The priority areas for EU support to the Eastern Partner countries in the period have been defined in the Regional East Strategy Paper following a comprehensive analysis of the problems in the region and based on the priorities of the Eastern Partnership. The

18 proposed action has bearing to a number of the challenges to be addressed according to the Regional East Strategy Paper, namely: overcome governance shortcomings through the capacity building actions in all components (training, introduction of quality management systems, adoption of international and EU technical standards, implementation of operational procedures) ensure environmental sustainability through the actions of component 4 Protection of the marine environment of the Black Sea reform the transport sector through the actions of all components (ratification of international instruments, promulgating national laws and regulations, approximation with the acquis, operational procedures) promote regional cooperation among partner countries and with the EU through the actions of component 2 Port State Control in the Black Sea region and component 3 VTS and VTMIS in the Black Sea region ensure the correct implementation of the concluded and signed Association Agreements through the actions of component 7 Bilateral activities A Regional Action Strategy on Maritime Safety, Security and Environmental Protection for the period up to 2021 has been developed in the framework of the SASEPOL project in order to identify concrete actions that would lead to attaining the general objectives improved maritime safety, security and environmental protection. The implementation of some of the identified measures has been supported in the framework of the EU funded projects mentioned in 1.4. Although substantial progress has been achieved in the partner countries, still a lot needs to be done. Large-scale and fundamental reforms are time and resource consuming and therefore progress takes time. Therefore further support will be needed to ensure the implementation of the measures identified. This approach is in line with the continuity principle in programming EU financial support according to which bringing EU investments to orderly completion or continuing them when necessary shall be considered in the programming (instructions for programming the ENI). This is essential to ensure the sustainability of the reforms. In order to address the identified problems in the area, the new project 'Maritime safety, security and marine environmental protection in the Black and Caspian Sea Regions' foresees actions in the following priority areas: Flag State Implementation: beneficiaries that have not yet undergone the voluntary IMO audit scheme have to be supported in order to successfully prepare for the mandatory one and, eventually, supported to prepare and then implement the rectification plan agreed with the IMO. Georgia, that has already undergone to the IMO audit will be supported to implement the rectification plan agreed with IMO and to implement additional measures recommended at international level but made mandatory by the EU maritime legislation such as the establishment of a certified quality management system for the Flag State activities. Protection of the marine environment: the actions under this project will support beneficiaries to correctly implement the relevant international legislation; however the focus will be on the technical support needed to incentivise the ratification of MARPOL Annex VI by Georgia, Moldova and Kazakhstan. In addition those 14

19 beneficiaries in the in the Black Sea Region that will enact legislation on the Sulphur content of marine fuels used by ships with approximation with the acquis could use THETIS EU. Continue providing EMSA s services such as CleanSeaNet, jointly to an improved monitoring of the ships movements (also granted through the project), will allow the real-time detection of oil-spills along the beneficiaries coastline and will enhance the capability to respond to marine pollution. Awareness on the EU legislation on air emission will be raised in the countries with aim of bringing those beneficiaries willing so closer to the EU standards. Human Element: technical support will be needed to complete the process of ratification of the Maritime Labour Convention (MLC), Following the ratification efforts will focus on providing support to draft and adopt the national legislation and determinations to translate the flexibility of MLC in concrete requirements. Security of ships and ports: to complement the actions completed during the previous project, the focus will be on the national organisation and procedures put in place by the beneficiaries to ensure full and correct implementation of the ISPS Code. Particular emphasis will be put on the Port security that is an important issue covered by the EU legislation (Directive 2005/65/EC on enhancing port security) which is in line with the 2005 ILO/IMO Code of Conduct for port security and that allows the competent authorities to have a coordinated and harmonised approach to the security measures in place in each port rather than on the security measures in place in each individual facility established in the port area. Information on the provisions of the Commission Recommendation of 11 March 2010 on measures for self-protection and the prevention of piracy and armed robbery against ships and its enforcement would also be beneficial. The programme should therefore deliver trainings both at regional and at national levels for the beneficiary countries. At national level it should address the central level of the administrations of the beneficiary countries and the local port level. Common trainings and exercises for the two last mentioned levels would create synergies. Port State Control: Cooperation and exchange of information between port States of the same region is of a paramount importance for an effective PSC activity. In the Black Sea port State work together in the Black Sea Memorandum on PSC while beneficiaries, coastal states of the Caspian Sea are performing PSC inspections without any cooperation of coordination between themselves. Therefore, the possibility of starting a possible cooperation in this area between Azerbaijan, Kazakhstan and Turkmenistan will be explored and incentivised. 2 RISKS AND ASSUMPTIONS Political support from the partner countries relevant ministries and governmental bodies not only at national, but also at regional level is needed to reach the project s objective. It is also assumed that governments will allocate the necessary resources to sustain the improved capacity for managing maritime safety and marine pollution by prevention, preparedness and response. On a more concrete level, the following risks have been identified: 15

20 Risks Political instability and security constraints Maritime safety and marine pollution caused by ships is not among the priorities of some of the partner countries policies and cannot rely on abundant financial resources. Lack of commitment to the reform process Insufficient human resources and technical expertise required from the attendants to activities of this programme Various interpretations of rules and requirements Complexity of the programme, involving the participation of a larger number of countries, beneficiary institutions and administrations Lack of coordination between similar simultaneous projects and initiatives of relevant regional organisations Insufficient cooperation between the beneficiary countries on the cross-regional level, and limited engagement of partner countries Risk level (H/M/L) M H M M M M M M Mitigating measures The risk could be mitigated by supporting beneficiaries to establish an organisational structure enabling them to make the best use of the limited resources available. Although some countries may show reluctance to implement some of the proposed reforms, this project is regional and some countries have shown already their willingness to implement reforms. Partner countries will be asked at the inception phase of the project to commit enough resources for the implementation of the programme. This will be mitigated by providing appropriate training and information on the experience of EU-Member States implementing these rules and requirements. The implementing bodies will mitigate this risk by having a strong project monitoring system established. To mitigate this risk a technical coordination mechanism will be integrated in the organisational set-up of the project (see below). To mitigate the risks the project will incentivise regional cooperation and initiatives aiming at sharing information and best practices in the region. The project provides a formula for flexible participation, which may be applied where there is a consensus to do so. This formula will allow the speed up of cooperation among the readied countries, rather than having to wait for all members to join all aspects of cooperation from the start. Lack of sustainability of the action M The project will propose an exit strategy. 3 LESSONS LEARNT, COMPLEMENTARITY AND CROSS-CUTTING ISSUES 3.1 Lessons learnt Experience during previous projects showed that most of the beneficiaries are committed for making the necessary improvements. This is demonstrated by the gradual progress in the implementation of the priority actions of the 2011 Regional Action Strategy on Maritime Safety and Security and Environmental Protection developed within the framework of the EU financed project SASEPOL. Turkmenistan ratified MARPOL Annex VI in 2014 and Georgia the Ballast water management convention in Further ratifications are under way. Georgia completed an audit under the Voluntary IMO Member States Audit Scheme. Kazakhstan also intends to volunteer and currently prepares for audit. 16

21 However there are a number of factors that limit the achievements of assistance projects or cause delays in expected outputs. Whilst the ratification and proper implementation of international instruments related to maritime safety, security and environmental protection have been among the objectives of previous EU funded projects, the ratification process in the beneficiary countries takes a long time due to complex national procedures. The proper implementation requires the adoption and utilisation of operational procedures. In some cases it further requires additional resources staff, equipment, etc. The complex institutional setting, the character of the decision making process (power to take decisions restricted to the very high level management) and the restricted resources have proven to be limitations to the achievements of even better results. The complex structure of the maritime administrations and the associated decision making process also make more difficult the full and active participation of beneficiaries experts to the technical actions organised in the framework of past and on-going projects. Another obstacle to a more effective implementation of projects is the language used. The first months of implementation of the TRACECA II project have taught that translation from English to Russian and vice versa, both for meetings and very often for papers, help the project implementation. Another important lesson is that the different state of development (legislative, institutional and administrative) of the beneficiary countries requires a differentiated approach to the assistance which is in line with the principles of the proposed renewed Neighbourhood Policy. 3.2 Complementary actions Coordination is necessary with the following EU-funded programmes or projects in order to avoid overlapping and to create maximum synergies: ENI Cross-Border Cooperation programme Black Sea Basin , more specifically in relation to two of its programme priorities: 'improve joint environmental monitoring' (priority 2.1) and 'promote common awareness-raising and joint actions to reduce river and marine litter' (priority 2.2). For Azerbaijan, a twinning project Support to the State Maritime Administration to improve liability in maritime transport in the Republic of Azerbaijan started, aiming at ensuring a proper implementation and enforcement of maritime liability procedures foreseen in the international conventions on maritime safety, security and the prevention of the marine pollution in the related EU Acquis. For Ukraine, national TA project is planned to cover Port state control harmonisation with the Dir 2009/16/EC and also Dir 2009/45/EC on safety rules and standards for passengers, assisting all the stages transposition, implementation and enforcement. The project would also provide the design of the system for the establishment of SafeSeaNet; project to support the implementation of the Association Agreement and the national strategy in the transport sector in Ukraine. EMSA will be informed of further EU-funded actions in the beneficiary countries that might be launched after the start of the project in order to ensure proper coordination. 17

22 3.3 Donor coordination The Integrated Technical Cooperation Programme of IMO is designed to assist Governments which lack the technical knowledge and resources that are needed to operate a shipping industry safely and efficiently. Priority is given to technical assistance programmes that focus on human resources development and institutional capacity-building. Due to limited funds the ITCP focuses on developing countries mainly in Africa. There are few events organised in the framework of the ITCP in the Black and Caspian Sea region. Nevertheless the IMO Secretariat will be requested to provide information of any planned actions in the region throughout the duration of the project to avoid overlapping and to ensure synergy. Donor coordination at country level is ensured by the respective EU Delegations. Although at the international (IMO) and supranational level (EMSA, European Commission, EU Delegations) several platforms on maritime transport exist, the experience of previous projects has identified the need for strengthening project coordination processes in order to avoid the risk of duplication in activities. To this end, a technical board will be established in addition to the steering committee of this project. The Technical Board will be grouping representatives of the different EU-funded projects (including bilateral) involved in the domain, to maximise efficiency and planning and to ensure that there is no overlap and that project activities are known. The Technical Board shall consist of EMSA s appointed project management as well as the appointed project management of the aforementioned projects of the EU (such as Twinning/TAIEX etc.). The European Commission Programme Manager (DG NEAR C.2) will be invited. 3.4 Cross-cutting issues The proposed action has direct bearing to cross-cutting issues like illegal migration, transboundary pollution and safety. Shipping is by nature international. Therefore a shortcoming in safety, security or environmental control in one region tends to spread globally, affecting foremost adjacent regions. The EU shares a common basin (the Black Sea) with the beneficiary countries and therefor has a high interest to ensure that their maritime administrations are capable to perform efficiently their functions as Flag State, Port State and Coastal State authorities, thus minimising the risks that sub-standard shipping, resulting from poorly functioning maritime administrations, may pose in its areas of interest (territorial waters). Technically and operationally unsafe ships may cause accidents and incidents in EU waters and ports threatening human life and inflicting damage to property and to the environment. A major pollution incident in the waters of beneficiary countries may lead to transboundary pollution with severe and costly consequences to the environment and the coastal economies of EU Member States. Shortcomings in the area of maritime security increases the threat of illegal migration as well as of security incidents on board ships flying the flags of the beneficiary countries while in territorial waters and ports of the EU. The activities of the proposed action aim to introduce good governance and thereby enhance the capacity of the institutions in the beneficiary countries to ensure improved levels of 18

23 maritime safety, security and environmental control thus minimising the risks described above. Climate change mitigation is another cross-cutting issue that the proposed action addresses. The environmental protection component foresees support for the ratification and implementation of MARPOL, Annex VI which introduced inter alia mandatory measures to reduce emissions of greenhouse gases (GHGs) from international shipping. 4 DESCRIPTION OF THE ACTION 4.1 Objectives and results The overall objectives of the project are: 1) Improved maritime safety 2) Improved security of ships and port facilities 3) Reduced pollution to the marine environment 4) Improved level of maritime training and qualification of seafarers 5) Improved living and working conditions on board ships This will be achieved by addressing shortcomings, gaps and grey areas which may hamper the fulfilment of the related international obligations. The project expects to achieve the following outcomes: 1. Improved capacity of the national maritime administrations to ensure that they effectively and consistently discharge their obligations as flag States. 2. Beneficiary countries have in place national laws transposing the mandatory instruments with approximation with the acquis in those areas where EU legislation exists. 3. Enhanced national capacity for implementation of international legislation. 4. Increased approximation to EU practises in these fields. 5. Improved cooperation among beneficiary countries competent authorities and with the EU Member States and EU institutions. 6. Enhanced harmonisation between MoUs as well as the harmonisation of PSC inspections in the Black Sea region. 7. Enhanced cooperation on PSC issues between Caspian Sea beneficiary countries. 8. Improved capacity of competent authorities of the beneficiary countries to monitor and control maritime traffic in the region. 9. Improved traffic-monitoring image of the waters of the beneficiaries, i.a. through the enhancement of their T-AIS national networks and that of the region. 10. Improved sharing of traffic information. 11. Improved capacity to prevent, detect and respond to marine pollution. 12. Improved control and response to marine environmental pollution. 19

24 13. Beneficiaries are incentivised to ratify and are able to give full implementation to the MLC 2006 requirements. 14. Enhanced implementation of the STCW convention requirements as well as the ISM Code. 15. Improved institutional capacity to give full implementation to the ISPS Code requirements. 4.2 Main activities The project foresees a multitude of activities designed to help achieve the project s objectives, namely: Workshops, seminars and studies Operational support (on-site actions, provision of services including drafting of legislation, pilot projects) High-level seminars at national level with Parliament committees, to facilitate adoption/ratification of updated legal framework Targeted bilateral assistance Some of these actions will be addressed to all beneficiary countries while others will be finetuned to their specific needs taking into consideration: i) the geopolitical situation of each beneficiary; ii) the commitment of each country to the achievement of the goals of the ENP in general; and iii) the TRAS in particular and their progress which is in line with the more-formore principle introduced at the review of the European Neighbourhood Policy in The project foresees the following 7 components under which main activities are described. Component 1: Flag State implementation Comprehensive technical regulations and standards regarding the construction, equipment, manning and operation of ships have been developed and adopted by IMO in order to improve safety at sea and to minimize the adverse effect of shipping on the environment. The primary responsibility to ensure that ships comply with these standards rests with the Flag States. This can only be achieved through adequate implementation and effective enforcement of the standards laid down in the relevant conventions. Similarly working and living conditions of seafarers are ensured through the appropriate implementation of MLC The activities under this component aim at supporting the beneficiaries maritime administrations to promulgate legislation, establish and implement national procedures enabling them to effectively perform their obligations, and to exercise an effective Flag State jurisdiction in accordance with relevant instruments, thus contributing to the overall objective of the project to improve maritime safety, security and marine pollution prevention. The activities will concentrate on the following major aspects of flag State implementation: Promulgation of laws and regulations to give to the instruments full and complete effect; flag State surveys and managing fleet performance; delegation of tasks to Recognized Organizations (RO) and monitoring of ROs activities carried out on behalf of the Flag State; accident investigation. 20

25 Through fact finding missions and a consequent legal conformity check the level of compliance of national legislation for the beneficiary countries with the IMO Mandatory Instruments in their latest consolidated edition and other international instruments (such as MLC 2006) is to be identified. On the basis of the outcome of these check the necessary legislation transposing the mandatory instruments into national law of the beneficiaries to be drafted. Approximation with the acquis in those areas where EU legislation exists should be sought. The task could be complemented by appropriate training on the instruments as well as training of personnel to continuously monitor developments within IMO, identify when a new or an amended instrument has been accepted by the Organisation and timely transpose it into national legislation. Through an ad-hoc questionnaire submitted to all beneficiaries EMSA will seek for additional detailed information complementing the general one collected through the Overview of the maritime administrations. The detailed information will be used to identify gaps and possible improvements of the national structure and procedures in place as well as those introduced when enacting new legislation in the beneficiaries to monitor the performance of fleets and Recognised Organisations (ROs). Beneficiaries with no procedures in place but willing to properly discharge their obligations as flag States will be supported to establish tailor-made measures for monitoring the fleets performance and the ROs. Beneficiaries could also be supported if they wish to develop, implement and maintain a quality management system for the operational parts of the flag State-related activities of their administrations. Beneficiaries will continue to be supported, on regional and bilateral basis, to establish independent marine accidents investigative bodies and to carry out effective investigations on accidents occurred to vessels flying their Flags or occurred in the waters under their jurisdiction. On request and in coordination with other existing projects for technical assistance, support can be provided to beneficiary countries willing to implement specific pieces of EU legislation such as the Directive 2009/45/EC on safety rules and standards for passenger ships. These structural actions will be complemented by the provision of theoretical and practical trainings for beneficiaries maritime administration staffs working at the central administration and in-the-field with ships surveys. The involvement of experts from the EU Member States will ensure the necessary exchange of experience and best practices in view of reducing the existing gaps between EU and neighbouring countries standards. The actions in this component will support the beneficiary countries in their preparation for the mandatory audits under IMSAS. Expected Outputs: Analyses/studies of current practices and institutional arrangements and identification of measures for eliminating gaps. Where statutory tasks have been delegated to Recognised Organisations (ROs) and appropriate relevant legislation exists, text for tailor-made written agreements with ROs in line with the international Code for Recognised Organisations will be proposed for implementation by the beneficiaries that have provided all needed information to finalise the action. Tailor-made national procedures for monitoring fleet and ROs performance will be proposed to those beneficiaries that accepted to implement them. 21

26 Tailor-made national procedures for the ratification of newly adopted international legislation proposed for adoption. Provision of technical support to establish national marine accident investigative bodies in line with the relevant IMO Code. Provision of training for flag State inspectors on some selected topics (i.e. checking the compliance of vessels to MARPOL Annex VI or to the MLC). Provision of technical support to define minimum criteria for flag State inspectors. Provision of technical support to establish a quality system for maritime administrations according to the relevant ISO standards. Upon request beneficiaries will be supported with the preparation, execution and assessment of external emergency response plans to verify their compliance with the Directive 2013/30/EC as well as with the development of a catalogue of emergency equipment and services available. Component 2: Port State Control in the Black Sea region Port State Control activities are much more effective when organised on a regional basis. Therefore harmonised approach to PSC activities in the beneficiary countries will enhance the maritime safety standards in the region and will prevent distortion of the competition between operators and ports. The Black Sea littoral beneficiaries perform PSC within the framework of the BS MoU. The activities under this component will be directed towards further improvement of the technical requirements, criteria and standards applicable in the BSMoU through practical training for the PSC officers and further enhancing the coordination and harmonisation between the BSMoU members. The harmonisation between BSMoU members will also be pursued through the proposal for the adoption of a mandatory training scheme for PSC Officers (PSCOs). Continuous support in the area of PSC is also necessitated by the everchanging requirements set out in the relevant international instruments and the need to approximate practices with the other PSC memoranda (Paris MoU and MED MoU). Seminars and trainings in the field of Port State Control will be organised in the BS region with the participation of experts of the neighbouring MoUs. Tools developed and managed by EMSA, such as RuleCheck and MaCKs, on behalf of the European Commission will continue to be updated and provided to the BSMoU through its Secretariat. The exchange of information and the harmonisation of inspections within the region are of a paramount importance for the effectiveness of PSC activity. Therefore, under this component any possibility of enhancing the cooperation on PSC issues between beneficiaries that are Caspian Sea coastal States will be explored and beneficiaries will be supported to develop the necessary organisational and procedural framework to facilitate the cooperation. This can include the development of a dedicated information system to serve as platform for the exchange of PSC information between the cooperating Caspian Sea countries. For those beneficiaries that will enact legislation with approximation with the acquis, technical and operational support would be provided for relevant PSC requirements deriving from this legislation. Particular emphasis could be given to Directive 2012/33/EU amending Council Directive 1999/32/EC as regards the sulphur content of marine fuels and Directive 2002/59/EC on Port Reception Facilities. Expected Outputs: 22

27 Proposal to BSMoU Committee for the establishment for a mandatory training scheme for PSCOs. Following the adoption by the BSMoU Committee, implementation of the mandatory training scheme for BSMoU PSCOs through the project. Provision of EMSA tools (Rulecheck and MaCKs). Technical and operational support for the approximation to the acquis of related PSC legislation. Component 3: Vessel Traffic Monitoring (VTS) and Information Systems (VTMIS) in the Black Sea region Currently the Black and Caspian Sea costal States operate VTS on a local level (port VTS) or on a national level (coastal VTS). Furthermore the state of development and deployment of such systems varies greatly from country to country. The establishment of a per definition regional VTMIS in the Black and Caspian Sea regions will greatly supplement and enhance the national capacity for vessel traffic monitoring, PSC, and maritime pollution preparedness and response by allowing data exchange and thus creating better overall picture of the maritime traffic (improving maritime domain awareness). It will enable the individual States to forecast the dangers and the risks, to be in a position to know the situation outside the areas of responsibility of specific VTSs and to carry out risk analysis. It will create positive benefits for all coastal countries in terms of, for instance, search and rescue services and quality of the marine environment as a result of an enhanced capability of detecting potential polluters. Although these benefits of establishing VTMIS seem to be widely known and acknowledged in the beneficiary countries, such infrastructure is still not commonly in place. The lack of exchange of AIS data between countries further reduces the worth of the available infrastructure. In this respect it is important that beneficiaries: continue developing AIS shore based infrastructure in those coastal areas that are not already covered by AIS, and continue developing VTS and mandatory ship reporting systems in those areas where traffic volumes and risks justify it. To enable all beneficiaries to share their AIS information, identified lack of infrastructure will be addressed by facilitating the donation of AIS infrastructures in good working order and dismissed by the EU Member States in the frame of a process of renewal of the existing stations. Should none of such AIS infrastructure be made available by the EU Member States, the possibility to support beneficiaries to establish or enhance their national network will be explored by buying on the market and providing them with the necessary AIS stations to cover the national coastline. Through this task training for VTS operators will be also provided upon request by the beneficiaries. Furthermore workshops will be organised to explore beneficiaries willingness to share AIS information and to implement a pilot project bringing them to share AIS information through the Mediterranean Server (MAREΣ), firstly between themselves and, as a second step, with the Black Sea EU Member States. The T-AIS information shared shall be enriched with the 23

28 provision of SAT-AIS information to provide a better picture of the maritime traffic in the Black and Caspian Sea. Expected Outputs: Pilot projects on AIS sharing through IMDatE. Provision of SAT-AIS information through IMdatE Training of IMDatE operators Donation of lacking AIS infrastructure. Training for VTS operators. Component 4: Protection of the marine environment of the Black Sea The activities under this component will focus in two directions, namely: first to raise awareness of the need of the beneficiaries to accede to and implement those international conventions to which they are still not parties, to fully implement those to which they are already Parties and to enact legislation with approximation to the EU acquis and to provide them with the necessary technical assistance and support in the process; and second, to provide the beneficiaries with operational support in the area of marine environmental protection. To that end the provision of the CleanSeaNet service (the European oil spill monitoring and vessel detection service, which was set up to support EU Member States actions to combat deliberate or accidental pollution in the marine environment) through the IMDatE services launched within TRACECA II will be continued to facilitate better environmental law enforcement. The beneficiaries bordering the Black Sea will also be provided with additional support to top-up their capacities to combat ship-sourced (Oil, Hazardous and Noxious Substances (HNS), generation of marine litter in connection to implementation of MARPOL Annex V), marine pollution through the EU Network of Stand-by Oil Spill Response Vessels, in line with the revised mandate of the EMSA funding Regulation. In addition, through workshops, seminars and provision of technical assistance (including external consultants) awareness will be raised and support provided to enhance the enforcement and implementation of environment related international and European legislation in order to approximate the beneficiaries standards to the European ones. Some of the areas covered will be air emissions from ships; ships recycling and green-house-gases. The technical assistance provided in the field of air emissions from ships will focus on sulphur emissions and will support the beneficiaries to be ready to implement the current international regulations, future stricter requirements that may come into force on 2020 as well as compliance of ships flying the flag of the beneficiaries calling EU ports. In this respect beneficiaries can benefit: 1. of the EU Member States experience with the implementation of the Directive 99/32/EC as amended and the related provision for inspections and sampling that are not included the relevant international legislation (Guidance for Sulphur Inspectors and relevant training); 2. of the development of national legislation on the Sulphur content of marine fuels used by ships with approximation to Directive 99/32/EC as amended and the use of THETIS EU, with the possibility of assistance to the beneficiaries if they opt to use remote sensing technology for reporting potential violations of Sulphur emission limits; 24

29 3. of improved Port Reception facilities and better enforcement of MARPOL V, leading to reduced illegal waste discharges at seas. In field of ships recycling the beneficiaries will be supported to give proper and complete implementation to the Hong Kong Convention. In addition support could be given for implementation of Regulation (EU) 1257/2013 by: 1. the criteria set up by the Ship Recycling Regulation to have their recycling facilities included in the EU list in order to be able to recycle EU flagged ships; 2. assisting them in relation to the provisions of the Ship Recycling Regulation on ships flying a non-eu when calling in a port of the EU; 3. Developing a module in MackS for Flag State Surveyors. In the field of ballast water management the beneficiaries will be supported to implement the relevant IMO Convention, as appropriate. In the field of marine litter, the beneficiaries will be supported to implement Port Reception Facilities Directive, or at least its principles/methods. Marine litter is a major environmental challenge in the Black Sea and a topic which is receiving increasing international attention 3. A system of notification to a vessel s next port of call of the status of its on board retention of bilge waters, oily wastes, HNS residues, sewage, garbage, ozone-depleting substances and exhaust gas cleaning residues could be developed or facilitation of the dedicated module of THETIS-EU which caters requirements stemming out the Port Reception Facilities Directive (2000/59/EC) could be investigated. Technical support will also be provided to enable owners and managers of ships flying the flag of beneficiaries to comply with the Regulation (EU) 2015/757 on monitoring, reporting and verification of carbon dioxide emissions from maritime transports. Expected Outputs: Technical support to beneficiaries in order to boost and the appropriate implementation of the most updated international instruments on marine environmental protection. Reduction of marine litter from shipping in the Black Sea Operational support to beneficiaries by continuing the provision of an access to EMSA s network of Oil Spills Recovery Vessels. Provision of CleanSeaNet service through IMDatE, Operational support to beneficiaries by providing access to THETIS EU and appropriate training to Inspectors for implementation of EU requirements in the area of Port Reception Facilities and Content of Sulphur in Marine Fuel, provided that they enact relevant legislation with approximation with the acquis in those areas Technical support to comply with the regulation (EU) 2015/757, provided that they enact relevant legislation with approximation with such Regulation Component 5: Human Element 3 The beneficiaries (together with the other UN countries) to the Rio+20 Conference committed to take action to, by 2025, achieve significant reductions in marine litter to prevent harm to the coastal and marine environment. 25

30 The human element is an important factor in maritime safety. It is a complex multidimensional issue that affects maritime safety, security and marine environmental protection involving the entire spectrum of human activities performed by ships crews, shore based management, regulatory bodies and others. 80% of maritime accidents can be attributed in some way to human element failures. The project will address the human element with the aim of achieving an effective enhancement of the maritime safety standards. This will be done by providing beneficiaries with the opportunity of sharing best practices with some selected EU Member States on the implementation of the MLC 2006 and providing them also with training activities for Flag and Port State inspectors to support the effective implementation of the relevant IMO and ILO legislation such as the Convention on Minimum Standards of Training and Certification and Watch-keeping (STCW), the MLC and the International Safety Management (ISM) Code made mandatory through the SOLAS convention. Expected Outputs: Training and sharing best practices on the implementation of the MLC 2006 and related human element - IMO and ILO legislation. Component 6: Security of ships and port facilities Security, and more so measures to improve it, is becoming an issue of increasing importance especially taking into account the growing political instability in the area and the vulnerable strategic infrastructure in the ports of the beneficiary countries. This activity aims to improve the implementation of the mandatory SOLAS maritime security requirements together with a progressive alignment of the beneficiaries national performances to the EU standards by focussing on two main pillars: awareness and knowledge. The Guidance for the development of national maritime security legislation to be adopted by the IMO in May 2016 should also be used in the programme to increase the adequacy of the national legislation of the beneficiary countries with the international requirements. The objective will be achieved by addressing the institutional capacity of the relevant administrations and through training sessions both about ship, port facility and port security. The programme should therefore deliver trainings both at regional and at national levels for the beneficiary countries. At national level it should address the central level of the administrations of the beneficiary countries and the local port level. Common trainings and exercises for the two last mentioned levels would create synergies. Through practical training events and sharing best practices with the EU Members States beneficiaries will be actively supported to implement their obligations both as port State and as Flag State and to monitor the activity performed by Recognised Security Organisations on their behalf (if any). Expected Outputs: Improved security of ships and port facilities Improved institutional capacity to give way for full implementation to the ISPS Code requirements Increased approximation to EU practises in the field of maritime security. Component 7: Bilateral activities Beneficiary countries have different characteristics. The length of their coast line, the size and composition of their fleets, their maritime industry and their administrations, the number of 26

31 seafarers, and the number of international conventions on maritime safety ratified and implemented vary considerably from country to country. For this reason they can have different and specific priorities which will be identified during an inception phase which will include an interactive dialogue with each beneficiary country. As an outcome bilateral actions will be designed to best address the needs identified taking also into account their relevance to the achievement of the goals of the TRAS and the commitment of each beneficiary to implement the reforms supported by the project. The bilateral actions will be identified by analysing the outcome of the regional actions implemented as well as on the basis of specific requests coming from the beneficiaries. All identified bilateral needs will be evaluated from the technical point of view by EMSA before being submitted for approval to the Contracting Authority together with an indication of the budget to be allocated. Expected Outputs: as a complement to the regional activities planned, specific needs of each beneficiary will be addressed to enhance their capacity to give full implementation to international legislation and to further enhance maritime safety, maritime security and marine pollution prevention standards in the countries. Component 8: Communication and visibility This component will ensure the required publicity and visibility to the project and its results. The objective will be pursued inter alia through newsletters and the publication of all material and news about the project on the EMSA website and other relevant websites as indicated by the Contracting Authority, through regular updates. Expected Outputs (minimum): two newsletters per year will be prepared, published on the web and made available to all interested parties in the project; activities undertaken and related outcome will be publicised on the implementing body s website. 5 IMPLEMENTATION 5.1 Financing agreement In order to implement this action, it is not foreseen to conclude a financing agreement with the partner country, referred to in Article 184(2)(b) of Regulation (EU, Euratom) No 966/ Indicative implementation period The indicative operational implementation period of this action, during which the activities described in section 4.1 will be carried out and the corresponding contracts and agreements implemented, is 60 months from the date of adoption by the Commission of this Action Document. Extensions of the implementation period may be agreed by the Commission s authorising officer responsible by amending this decision and the relevant contracts and agreements; such amendments to this decision constitute technical amendments in the sense of point (i) of Article 2(3)(c) of Regulation (EU) No 236/

32 5.3 Implementation modalities Grant: direct award to the European Maritime Safety Agency (EMSA) (a) Objectives of the grant, fields of intervention, priorities of the year and expected results. See section 4. (b) Justification of direct grant. Article 190(1) (f) of Commission Delegated Regulation (EU) No 1268/2012 authorises that grants be awarded without a call for proposals for actions with specific characteristics that require a particular type of body on account of its technical competence, its high degree of specialisation, on condition that the actions concerned do not fall within the scope of a call for proposals. On this basis and under the responsibility of the Commission s authorising officer responsible, the grant may be awarded without a call for proposals to a specialised entity having relevant specific experience and capacities in the fields of intervention. For the reasons detailed below, EMSA has been identified as the most suitable entity. EMSA, as Agency of the European Union, was given specific regulatory and executive tasks in the field of maritime safety, security and marine environmental protection. Regulation 1406/2002 establishing EMSA was adopted by the European Parliament and the Council on 27 June 2002 and entered into force in August of the same year. EMSA provides technical and scientific assistance to the Commission in the fields of maritime safety, maritime security, prevention of pollution, and response to pollution caused by ships. Following an initiative of the IMO regarding LRIT, the EU Member States decided in 2007 to set up an EU LRIT data centre managed by the Commission, in cooperation with EU Member States. In addition, a major component under this project is related to PSC, i.c. the upgrade and harmonization of the relevant procedures, and the need to approximate practices with the other PSC memoranda, i.e. the Paris and MED MoU. EMSA, seating in the institutional bodies of the latter MoU's, is most suited to achieve the necessary results. Further related to PSC, tools developed and managed by EMSA, such as RuleCheck and MaCKs, on behalf of the EC will continue to be updated and provided to the beneficiary countries through the Secretariat of the BSMoU. These tools contribute to achieve the necessary quality of the related control tasks to be performed by the beneficiary countries. Above elements give evidence to the specific experience, capacities and mandate in the fields of intervention justifying the direct award. To be noted also that, based on the budget of a current project EMSA is implementing on behalf of the EC, the cost of the activities is demonstrable lower than compared to average private consortium prices, e.g. salaries of staff engaged by EMSA under the project are in total significantly lower than the total amount of average consultancy fees that would be expected for implementing same kind of activities, whilst EMSA as an EU-Agency is also not claiming any indirect costs on the project budget. On 28 October 2010, the Commission proposed to update the EMSA Regulation to adapt its tasks following the entry into force of the third maritime safety package and to reinforce cooperation with neighbouring countries. On its plenary session on 11 December 2012, the European Parliament voted in favour of the new regulation. EMSA's competence is extended, 28

33 in particular to enable the Agency also to intervene, at the request of the Member States concerned, in the event of pollution from oil and gas installations. EMSA is also asked to contribute to other EU policies and projects related to its field of expertise. In addition, the Agency provides assistance for technical work in international and regional organisations, and cooperation with neighbouring countries is enhanced. Under the responsibility of the authorising officer by delegation, the recourse to an award of a grant without a call for proposals is justified because of EMSA unique mandate and specific technical expertise to execute the tasks of the project. (c) Eligibility conditions Not applicable. (d) Essential selection and award criteria The essential selection criteria are financial and operational capacity of the applicant. The essential award criteria are relevance of the proposed action to the objectives of the action as described in this action document: design, effectiveness, feasibility, sustainability and costeffectiveness of the action. (e) Maximum rate of co-financing The maximum possible rate of co-financing for this grant is 100 % in accordance with Articles 192 of Regulation (EU, Euratom) No 966/2012 if full funding is essential for the action to be carried out. The essentiality of full funding will be justified by the responsible authorising officer in the award decision, in respect of the principles of equal treatment and sound financial management. (f) Indicative trimester to contract the potential direct grant beneficiary 2nd trimester of Scope of geographical eligibility for procurement and grants The geographical eligibility in terms of place of establishment for participating in procurement and grant award procedures and in terms of origin of supplies purchased as established in the basic act and set out in the relevant contractual documents shall apply, subject to the following provisions. In accordance with Article 16 of Regulation (EU) No 232/2014 and with regard to the aim of ensuring coherence and effectiveness of EU financing, and fostering regional and transregional cooperation, the Commission decides that natural and legal persons from the following countries, territories or regions shall be eligible for participating in procurement and grant awared procedures: Iran, Kazakhstan, Turkey and Turkmenistan. The supplies originating there shall also be eligible. The Commission s authorising officer responsible may extend the geographical eligibility in accordance with Article 9(2)(b) of Regulation (EU) No 236/2014 on the basis of urgency or of unavailability of products and services in the markets of the countries concerned, or in other duly substantiated cases where the eligibility rules would make the realisation of this action impossible or exceedingly difficult. 29

34 5.5 Indicative budget Direct award of a grant to EMSA (direct management) EU contribution (amount in EUR) Indicative third party contribution N.A. TOTAL N.A. 5.6 Organisational set-up and responsibilities The project will be managed by the European Commission, Directorate General for Neighbourhood and Enlargement Negotiations (DG NEAR) Unit C.2 Regional Programmes Neighbourhood East. EMSA will implement the project. The daily management of the project will be done in close cooperation with counterpart institutions, national regulatory institutions and administrations and with other relevant national authorities. EMSA shall closely coordinate with the relevant EU Delegations, in consultation with DG NEAR C Performance monitoring and reporting The day-to-day technical and financial monitoring of the implementation of this action will be a continuous process and part of the implementing partner s responsibilities. To this aim, the implementing partner shall establish a permanent internal, technical and financial monitoring system for the action and elaborate regular progress reports (not less than annual) and final reports. Every report shall provide an accurate account of implementation of the action, difficulties encountered, changes introduced, as well as the degree of achievement of its results (outputs and direct outcomes) as measured by corresponding indicators, using as reference the logframe matrix (in annex). The report shall be laid out in such a way as to allow monitoring of the means envisaged and employed and of the budget details for the action. The final report, narrative and financial, will cover the entire period of the action implementation. It is also foreseen that the progress and work plan of the project will be monitored and discussed by a steering committee composed of EMSA, the maritime administrations/agencies of the beneficiary countries and the European Commission (the Directorate-General Mobility and Transport (DG MOVE), the Directorate-General Maritime Affairs and Fisheries (DG MARE) and the Directorate-General for Neighbourhood and Enlargement Negotiations (DG NEAR)). It shall convene minimally once a year, in a place to be agreed with the contracting authority. The Commission may undertake additional project monitoring visits both through its own staff and through independent consultants recruited directly by the Commission for independent monitoring reviews (or recruited by the responsible agent contracted by the Commission for implementing such reviews). 30

35 5.8 Evaluation Having regard to the nature of the action, a final evaluation will be carried out for this action or its components via independent consultants contracted by the Commission. It will be carried out for accountability and learning purposes at various levels (including for policy revision). The Commission shall inform the implementing partner at least two months in advance of the dates foreseen for the evaluation missions. The implementing partner shall collaborate efficiently and effectively with the evaluation experts, and inter alia provide them with all necessary information and documentation, as well as access to the project premises and activities. The evaluation reports shall be shared with the partner countries and other key stakeholders. The implementing partner and the Commission shall analyse the conclusions and recommendations of the evaluations and, where appropriate, in agreement with the partner country, jointly decide on the follow-up actions to be taken and any adjustments necessary, including, if indicated, the reorientation of the project. The financing of the evaluation shall be covered by another measure constituting a financing decision. 5.9 Audit Without prejudice to the obligations applicable to contracts concluded for the implementation of this action, the Commission may, on the basis of a risk assessment, contract independent audits or expenditure verification assignments for one or several contracts or agreements. The financing of the audit shall be covered by another measure constituting a financing decision Communication and visibility Communication and visibility of the EU is a legal obligation for all external actions funded by the EU, and will be given high importance during the implementation of the action. This action shall contain communication and visibility measures which shall be based on a specific Communication and Visibility Plan of the Action, to be elaborated at the start of implementation and supported with the budget indicated in section 5.5 above. The implementation of the communication activities shall be mainly the responsibility of the grant beneficiary. In terms of legal obligations on communication and visibility, the measures shall be implemented by the Commission, the partner countries, and/or the grant beneficiary. Appropriate contractual obligations shall be included in the grant contracts. The Communication and Visibility Manual for European Union External Action shall be used to establish the Communication and Visibility Plan of the Action and the appropriate contractual obligations. Additional visibility guidelines developed by DG NEAR will be followed where appropriate.visibility and communication actions shall demonstrate how the intervention contributes to the agreed programme objectives and the accession process. Actions shall be aimed at strengthening general public awareness and support of interventions 31

36 financed and the objectives pursued. The actions shall aim at highlighting to the relevant target audiences the added value and impact of the EU's interventions. Visibility actions should also promote transparency and accountability on the use of funds. It is the responsibility of the beneficiary to keep the EU Delegation fully informed of the planning and implementation of the specific visibility and communication activities. The beneficiary shall report on its visibility and communication actions in the report submitted to the ENI monitoring committee and the sectoral monitoring committees. 32

37 Specific objective(s): Outcome(s) Overall objective: Impact ANNEX I - INDICATIVE LOGFRAME MATRIX The activities, the expected outputs and all the indicators, targets and baselines included in the logframe matrix are indicative and may be updated during the implementation of the action, no amendment being required to the financing decision. When it is not possible to determine the outputs of an action at formulation stage, intermediary outcomes should be presented and the outputs defined during inception of the overall programme and its components. The indicative logframe matrix will evolve during the lifetime of the action: new lines will be added for including the activities as well as new columns for intermediary targets (milestones) for the output and outcome indicators whenever it is relevant for monitoring and reporting purposes. Note also that indicators should be disaggregated by sex whenever relevant. Results chain Indicators Baselines (incl. reference year) Improvement of maritime safety Improved security of ships and port facilities Reduced pollution to the marine environment Improved level of maritime training and qualification of seafarers Improved living and working conditions on board ships Improved capacity of the national maritime administrations to ensure that they effectively discharge their obligations as flag States. Increased approximation to EU practises in these fields. Enhanced harmonisation of inspections between MoUs on PSC; # of marine accidents to beneficiaries' vessels # and volume of accidental and deliberate discharges # of notifications to ILO on MLC deficiencies identified during PSC inspections Performance of Flag States under PMoU on PSC Ratification of international conventions and adoption of national procedures National legislation and procedures in place Targets (incl. reference year) Sources and means of verification 2015: 2020 Statistics on maritime accidents and incidents National statistical informatio n ILO secretariat Flag State Performance in 2015: AZ (N/A fleet operating only in the Caspian Sea) GE: currently not Flag State Performanc e in 2020: - improved flag performance for all PMoU database and statistics BS MoU statistics IMO audit Assumptions The Beneficiary Countries governments maintain their commitment to implement changes at 33

38 Improved cooperation among beneficiary countries competent authorities, EU Member States and EU institutions. Enhanced cooperation on PSC issues between Caspian Sea coastal states. Improved traffic monitoring of the beneficiaries' waters through the enhancement of the national T- AIS networks Improved traffic monitoring in the Black and Caspian sea through the provision of SAT-AIS information Improved capacity to prevent, detect and respond to marine pollution; Beneficiaries incentivised to ratify and are able to give full implementation to the MLC 2006 requirements. Enhanced implementation of the maritime labour standards, the STCW convention requirements as well as the ISM Code. Improved institutional capacity to give full implementation to the ISPS Code requirements. Increased approximation to EU practises in the field of maritime security. Reduced number of substandard ships operating in the region Independent accident investigation bodies established Concluded written agreements with Recognised organisations and monitoring reports # of beneficiary countries undergoing audits under the IMSAS Strategies and/or plans devised for the development and deployment of VTMIS in the beneficiary countries Introduction of VTMIS systems # of beneficiaries sharing AIS information Countries enabled to cover the entire coastline with an AIS network Cooperation agreements on AIS sharing Mandatory reports under MARPOL on Paris MoU flag performance list IR: on Paris MoU White list (excess factor -0.90) KZ: on Paris MoU White list (excess factor -0.79) MD: on Paris MoU Black list (excess factor +2.43) UA: on Paris MoU Grey list (excess factor +0.10) TU: on Paris MoU White list (excess factor ) TM: (N/A fleet operating only in the Caspian Sea) Conventions ratified and procedures adopted on 2015: AZ: 15 GE: 21 IR: 22 KZ: 10 MD: 10 UA: 17 TU: 18 countries on the Grey and Black Lists of the Paris MoU - upholding of the position on the White list - Convention s ratified and procedures adopted on : AZ GE: IR: KZ: MD UA: TU: TM: National legislation and procedures reports IMO GISIS ILO database legislative, institutional and operational levels. Beneficiary Countries and EU allocate the resources necessary to implement and sustain the reforms. Some of the tasks imply a request from the beneficiaries and their close cooperation for fulfilling them. It is assumed that the budget available and the duration of the Grant (4 years) shall be sufficient to fulfil all 34

39 response rate (%) of the Coastal States to pollution incidents # of beneficiary countries on the STCW White list of IMO % of fleet (to which the MLC requirements apply) certified under MLC Convention recognition of the BC maritime training and certification systems by the EU # of ports covered by port facility security plan (PFSP) % of fleet (to which the ISPS requirements apply) certified under ISPS Code - TM: 10 National legislation and procedures in place on : AZ GE: IR: KZ: MD UA: TU: TM: Number of beneficiaries undergone to (V)IMSAS on 2015: - 1 (GE) # of countries sharing T-AIS data in 2015: none in place on : AZ GE: IR: KZ: MD UA: TU: TM: Number of beneficiaries undergone to (V)IMSAS on 2020:- 4 (AZ, KZ, UA and TM) # of countries sharing T- AIS data in in 2020: 3 requests however the latter will be re assessed during the lifetime of the action 5 to be defined after the start of the project together with the beneficiary countries, depending on the national legislative procedures and priorities 4 to be defined after the start of the project through Fact-finding missions 35

40 Outputs Analyses/studies of current practices and institutional arrangements and identification of measures for eliminating gaps. Written agreements with ROs signed where not existing or aligned to ROs Code where existing Tailor-made procedures for monitoring fleet and ROs performance proposed to beneficiaries that accepted to implement them Tailor-made national procedures for the ratification of newly adopted international legislation proposed for adoption. Provision of technical support to establish national marine accident investigative bodies in line with the relevant IMO Code; Provision of training for flag State inspectors on some selected topics (i.e. checking the compliance of vessels to MARPOL Annex VI or to the MLC); Provision of technical support to define minimum criteria for flag State inspectors; Provision of technical support to establish a quality system for maritime administrations according to the relevant ISO standards Support with the preparation, execution and assessment of external emergency response plans to verify their compliance with the Directive 2013/30/EC as well as with the development of a catalogue of emergency equipment and services available. Proposal for a mandatory training scheme for PSC Officers to the BSMoU Committee; Implementation of the mandatory training scheme # analyses/studies # of trainings delivered # of experts trained # written agreements aligned to ROs Code # procedures for monitoring fleet and ROs performance drafted # national procedures for the ratification of newly adopted international legislation # countries supported to establish a marine accidents investigation body # procedures for the continuous and systematic training of Port State Control officers # countries supported to establish a quality management system for maritime administration # of countries supported to prepare, execute and assess external emergency plans according to Dir 2013/30/EC # of seminars for PSCOs organised # signed CSN Conditions of 36

41 for BSMoU PSCos as adopted by the BSMoU committee Provision of tools for PSCOs (Rulecheck and Distant Learning Package-MaCKs) Technical and operational support for the approximation to the acquis of related PSC legislation Pilot project on T-AIS data sharing through IMDatE Donation of lacking AIS infrastructure (AIS stations) Training for VTS operators Technical support for the implementation of the most updated international instruments on marine environmental protection. Training of Integrated Maritime Data Environment (IMDatE) operators Operational support by continuing the provision of access to EMSA s network of Oil Spills Recovery Vessels. Pilot project on provision of CSN services through IMDatE Access to THETIS EU and training to Inspectors for implementation of EU requirements in the area of Port Reception Facilities and Content of Sulphur in Marine Fuel, provided that they enact relevant legislation. Technical support to comply with the EU regulation 2015/757 Training and sharing best practices on the implementation of the MLC 2006 and related human element - IMO and ILO legislation. Use # CleanSeaNet images # of users for RuleCheck and MaCKs # of AIS stations donated # of trained IMDatE operators # of VTS operators trained # of images provided to beneficiaries which have signed the CSN CoU # of access to THETIS EU # of countries supported to comply with EU Regulation 2015/757 # external emergency response plans # catalogue of emergency equipment and services 37

42 Training on periodical reviews of security assessments and of security plans (ship, port facility and port) Training of internal and external auditors with practical demonstration of security audit (port facilities, ports and maritime companies) Table top exercises on conducting security assessments and drafting security plans (mainly but not restricted to port facilities and ports) Training on guidance and supervision of Recognised Security Organisations 38

43 ANNEX II: Ratification of conventions by the beneficiary countries 6 AZ GE IR MD TM TR UA KZ International Maritime Organisation Convention X X X X X X X X Convention for Safety of the Life at Sea (SOLAS) 1974 X X X X X X X X SOLAS - Protocol 1978 X X X X SOLAS - Protocol 1988 X X X X X X SOLAS - Agreement 1996 Convention on Load Lines 1966 X X X X X X X X Convention on Load Lines - Protocol 1988 X X X X X Convention on Tonnage Measurement of Ships X X X X X X X X Convention on the International Regulations for Preventing Collisions at Sea (COLREG) X X X X X X X X Convention for Safe Containers (CSC) X X X X X Convention on Standards of Training, Certification and Watchkeeping for Seafarers (STCW) X X X X X X X X Convention on Standards of Training, Certification and Watchkeeping for Fishing Vessels (STCW- F) X 6 The fact that countries have ratified a convention does not necessarily mean that they have updated their legislation to align it with the up to date version of the instrument. Hence fact finding missions to establish the level of alignment remains necessary. 39

44 AZ GE IR MD TM TR UA KZ International Mobile Satellite Organization (IMSO) X X X X International Convention on Maritime Search and Rescue X X X X Operating Agreement on the International Maritime Satellite Organisation (INMARSAT) X X X Convention on Facilitation of International Maritime Traffic X X X X Convention for the Prevention of Pollution from Ships (MARPOL) - Annex I through Annex V X X X X X X X X MARPOL - Annex VI X X X X X Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other Matter (London Convention) 1972 Protocol to the Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other Matter (London Protocol) Convention Relating to Intervention on the High Seas in Cases of Oil Pollution Casualties (INTERVENTION) X X X X X X X INTERVENTION Protocol 1973 X X International Convention on Civil Liability for Oil Pollution Damage (CLC) 1969 X X X X CLC - Protocol 1976 X X CLC - Protocol 1992 X X X X X X X Protocol to amend the Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage (FUND PROT) - Protocol 1992 X X X 40

45 AZ GE IR MD TM TR UA KZ Supplementary Fund to FUND PROT ( Protocol 1992) Athens Convention relating to the Carriage of Passengers and their Luggage by Sea (PAL) 1974 and Protocol X X X X Convention on Limitation of Liability for Maritime Claims (LLMC) 1976 X X X X LLMC Protocol 1996 X X Convention for the Suppression of Unlawful Acts against the Safety of Maritime Navigation including Protocol (SUA) 1988 SUA - Protocol 2005 X X X X X X X X X International Convention on Salvage (SALVAGE) X X X X Convention on Oil Pollution Preparedness, Response and Co-operation (OPRC) 1990 X X X X Protocol on Preparedness, Response and Co-operation to pollution Incidents by Hazardous and Noxious Substances (OPRC-HNS Protocol) 2000 X X International Convention on Civil Liability for Bunker Oil Pollution Damage (BUNKER) X X X Ballast Water Management Convention (BWM) X X X United Nations Convention on the Law of the Seas (UNCLOS) X X X ILO Maritime Labour Convention (MLC) X 41

46 This action is funded by the European Union ANNEX 2 of the Commission Implementing Decision on the ENI East Regional Action Programme 2016 and 2017, Part I Action Document for Eastern Partnership Integrated Border Management Flagship Initiative: introduction of an automated intelligent video-control system at road border crossing point Novaya Huta Novi Yarylovychi at the Belarus-Ukraine frontier 1. Title/basic act/ CRIS number 2. Zone benefiting from the action/location 3. Programming document 4. Sector of concentration/ thematic area 5. Amounts concerned Eastern Partnership Integrated Border Management Flagship Initiative: introduction of an automated intelligent video-control system at road border crossing point Novaya Huta Novi Yarylovychi at the Belarus- Ukraine frontier CRIS number: ENI/2016/ financed under European Neighbourhood Instrument Eastern Europe Region Beneficiary counties are Belarus and Ukraine The action shall be carried out at the road border crossing point Novaya Huta (in Russian: Novaya Guta) Novi Yarylovychi (Belarusian- Ukrainian border) Regional East Strategy Paper ( ) and Multiannual Indicative Programme ( ) Integrated Border Management Total estimated cost: EUR Total amount of EU budget contribution: EUR Parallel co-financing by Belarus (EUR ) and by Ukraine (EUR ) 6. Aid modality(ies) and implementation modality(ies) Project Modality Indirect management with the International Organization for Migration (IOM) [1]

47 7 a) DAC code(s) Security system management and reform Trade facilitation b) Main Delivery Channel 8. Markers (from CRIS DAC form) 9. Global Public Goods and Challenges (GPGC) thematic flagships International Organization for Migration General policy objective Not targeted Significant objective Main objective Participation development/good X governance Aid to environment X Gender equality (including Women X In Development) Trade Development X Reproductive, Maternal, New born X and child health RIO Convention markers Not targeted Significant objective Main objective Biological diversity X Combat desertification X Climate change mitigation X Climate change adaptation X Integrated Border Management Flagship Initiative SUMMARY This project will support Belarus' and Ukraine's customs and border guard services working at one road border crossing point (BCP) on the countries' common frontier (Novaya Huta Novi Yarylovychi). The proposed automated intelligent video-control system will have pilot character, to be rolled out at the entire Belarusian-Ukrainian border in the coming years. Currently, neither Ukraine nor Belarus has a similar structure in place. The system will be hooked up to the EUfunded PRINEX project an electronic information exchange network, launched in 2015, which sends details such as weight and type of goods transported to the customs of the neighbouring country prior to the arrival of a vehicle on the other side of the border. The new system will provide the number plate, the country of registration, the vehicle make, the number of persons in the vehicle and an image of the vehicle to the customs and border guard services on both sides of the frontier by automatically scanning the number plate and photographing the vehicle when it approaches the video-control system before the first boom barrier of the BCP. In order to guarantee system coherence with PRINEX, soft- and hardware compatibility and a simultaneous execution pace in both beneficiary countries, the project team will organise a series of expert-level coordination meetings for Belarus and Ukraine customs and border guard services through the whole project implementation period. It is expected that about 60% of the project funds will be spent on items such as IP (internet protocol) cameras, equipment for recognising vehicle number plates and software. Activities will also include testing / fine- [2]

48 tuning of relevant national software modules to ensure operational stability and the organisation of system administrator training sessions for customs and border guards staff working at that BCP. Ukraine's and Belarus' financial contributions (outside the delegation agreement) will fund the construction documentation development, its certification, construction works, scales and the lightning conductor systems. This project is expected to achieve the following results: (1) the time needed to carry out customs and border guard formalities for travellers and trucks will be reduced, (2) the countries' capacities to prevent and fight cross-border crimes will be improved, (3) levels of smuggling of illicit goods will be reduced, (4) the conditions for the free movement of persons, goods and means of transport will improve and (5), due to shorter vehicle queues, the environmental situation in the areas adjacent to the border crossing point will be enhanced. [3]

49 1 CONTEXT 1.1 Sector/Country/Regional context/thematic In 2014, Belarus had a population of 9.5 million living on a territory of 207,600 square km. In the same year, Ukraine had 44.3 million inhabitants. It has an area of 603,500 square km. According to World Bank figures for 2013, Belarus' Gross Domestic Product (GDP) at Purchasing Power Parity (PPP) per capita was USD 17,620 (64 th out of 185 countries) and its GDP (at PPP) USD 167 billion. The corresponding figures for Ukraine are USD 8,790 (105 th country in the world; figure of 2013) and USD 371 billion (2014), respectively. In 2013, Belarus' HDI (Human Development Index) value, which is a UN composite statistic of life expectancy, education, and per capita income indicators, was 0.786, which gave the country a rank of 53 out of 187 states with comparable data. Ukraine's HDI was (ranked 83 th ). The HDI of the region "Europe and Central Asia" stood at in that year, placing Belarus above and Ukraine slightly below the regional average Public Policy Assessment and EU Policy Framework Ukraine In 2010 and 2011, the cabinet of Ministers of Ukraine approved the Integrated Border Management (IBM) Concept on 27 October 2010 and its Action Plan on 5 January By listing its five main dimensions, the IBM Concept contains a clear reference to the EU IBM Strategy approved by an EU Council Conclusion in December According to the Concept, the State Border Guard Service of Ukraine has the overall responsibility for implementation of the tasks contained therein. Other stakeholders are the State Fiscal Service (formerly State Customs Service), State Migration Service, Ministry of Foreign Affairs and the State Security Service. Ukraine's Action Plan on the implementation of the IBM Concept consists of a list of specific tasks in the field of enhancement of the legal framework (national and international), creating a four-tier control system for entry and stay in Ukraine of foreigners and stateless persons, enhancing cooperation with national and international stakeholders, creating a single information system of subjects of integrated border management, bringing the procedure of border crossing of persons, vehicles and goods in line with EU standards, improving the system of border protection, improving the professionalism of personnel and ensuring cooperation and coordination of activities of subjects of IBM. Moreover, the project addresses directly Priority "Investment in Customs Modernisation" of the EU-Ukraine Association Agreement. Belarus Belarus has not adopted an IBM Strategy yet but work on it is progressing: a second draft of the document, prepared by the State Border Committee, is currently being discussed with the State Customs Committee (SCC BY). Its adoption by both services in the format of a "joint decision" (sovmestnoe postanovlenie) is expected to take place in the near future. Currently, the following strategic documents relate directly to the project: "Decision of the Customs Union Commission No. 688 of June , "Order of the SCC BY On the Ratification of the 1 Its exact name is: "On Common Requirements for Equipment and Hardware to be Installed in Buildings, Premises and Facilities Used For Border, Customs, Sanitary, Veterinary, Quarantine, Phyto-Sanitary and [4]

50 Main Development Directions of the SCC BY in the Period and Forecast until 2025" (not adopted yet), "Development Programme on the Transit Capacity of the SCC BY at Road and Railway Border Crossing Points in " (not adopted yet) and the "Order of the SCC BY 460 "On the Ratification of the Concept for the Development of Information and Communication Technologies during the Years " of 16 September Cooperation between Belarus and Ukraine Cooperation between Belarus and Ukraine in the sphere of customs information exchange is based on the "Protocol on Information Exchange between the State Customs Committee of the Republic of Belarus and the State Fiscal Service of Ukraine Concerning Goods and Vehicles Crossing the Customs Border of Belarus and Ukraine", which entered into force on 12 September While this Protocol does not detail the exact type of data to be transferred to the neighbouring country and, therefore, prevented them from exchanging any data, the "Regulation on the Interaction of Information Systems during Pre-Arrival Information Exchange between the State Customs Committee of the Republic of Belarus and the Ministry of Revenue and Taxes of Ukraine" (now State Fiscal Service), which was negotiated in the framework of the EU-funded PRINEX project and signed on 20 June 2014, provides nowadays for a solid legal basis for the data exchange between the customs services of the two countries. EU Policy Framework: Ukraine The last meeting of the EU-Ukraine Sub-Committee on Customs and Cross-Border Cooperation took place in Kyiv in October Along with the alignment of Ukraine's customs legislation to the EU customs acquis, the EU's cooperation with Ukraine is focused on the following issues: - Development of risk management systems, including a programme for authorised economic operators, and promoting exchanges of customs information; - Assistance in the accession to the Common Transit Convention; - Assistance in working towards accession to the Regional Convention on Pan-Euro- Mediterranean Preferential Rules of Origin, thereby fostering regional economic integration for trade in goods. Developing an authorised economic operator (AEO) concept in line with the EU legislation is one of the commitments taken by Ukraine in the Association Agreement. The current focus is on a comparative analysis of the respective AEO legislations conducted by European Commission and EU Member States experts. Exchange of experience and best practices will be shared by enabling participation in AEO Network meetings and conducting study visits to EU Member States. In order to improve risk management and facilitate trade between the EU and its Eastern neighbours, the Project Group on Exchanges of Information decided to launch a pilot project with Ukraine and Moldova on the transmission of TIR Carnet data. The ultimate objective of the exchanges of information before vehicles arrive is to allow the authorities to carry out risk analysis at central level in advance, to facilitate and to accelerate the border-crossing of goods consignments. Future accession of Ukraine to the common transit procedure would imply an important step forward in the country's integration into the Transport Control At the Border Crossing Points Located At the External Border of the Customs Union Member States, and On the Classification of the Border Crossing Points Across the External Border of the Customs Union Member States and On the Certificate Template for a Border Crossing Point On the External Border of the Customs Member States" [5]

51 EU customs system. Moreover, Ukraine has the status of an informal observer in the EU- EFTA Working Group on "Common Transit and the Simplification of Formalities in Trade in Goods". The country has informed the European Commission about its internal discussions regarding the potential accession to the Pan-Euro-Mediterranean Convention on Preferential Rules of Origin (PEM). EU Policy Framework: Belarus Currently, EU customs cooperation with Belarus is rather limited. The Council has agreed to normalise EU-Belarus relations, and in January 2015, COREPER approved a list of possible concrete measures to deepen the EU's policy of critical engagement with Belarus, including in the area of customs. Also, TAXUD has offered to Belarus Customs to resume more regular customs cooperation. However the reaction of Belarus has been restrained for the time being Stakeholder analysis The State Customs Committee of the Republic of Belarus (SCC BY) has about 5000 employees. Currently, this Belarusian service is administratively divided into nine "customs houses" (one in each territorial entity, Minsk international airport and HQ in Minsk). Customs officers are located at 25 road border crossing points (BCPs), 13 BCPs at railway stations, 7 international railway transfer stations, 7 BCPs at airports and 3 BCPs at river ports. Budgetary funding to this service by the government was stable over the past years. However, there is a tendency in the past 1-2 years that funding decreases due to the economic crisis the country is currently confronted with. The strategic focus of the SCC BY changed significantly when the Customs Union (CU) between Belarus, Kazakhstan and Russia was created in Apart from further harmonisation efforts linked to the formation of the CU, the creation of a prearrival info exchange system with EU countries appears to be the government's main priority as to Europe at the moment. The main objective is to reduce the processing time of goods shipped into, through and/or out of the country at Belarusian border crossing points. The border guard system is founded on a ten-year strategy covering the years , which, among others, foresees the transformation of the border guard into a service, which is based entirely on professionals in the coming four years (15 per cent of the staff are still conscripts). While the first five years of the strategy were dedicated to the establishment of the legal foundations for the reform, the years will be focussed on the implementation of activities (such as strengthening and demarcation of the Belarus-Ukraine border, abolishment of the use of conscripts, etc.). On 9 August 2013, the Belarusian President endorsed by decree the new state programme "On the Development and Modernisation of Infrastructure on the State Border of the Republic of Belarus and Border Zones ", which is supposed to complement the Strategy. In Ukraine, the Cabinet of Ministers approved the Integrated Border Management (IBM) Concept on 27 October 2010 and its Action Plan on the 5 January By listing its five main dimensions, the IBM Concept contains a clear reference to the EU IBM Strategy approved by the Council Conclusions of 4-6 December According to the Concept, the State Border Guard Service of Ukraine has the overall responsibility for the implementation of the tasks arising from it. Currently, the customs department of the State Fiscal Service of Ukraine (SFS UA) has approximately 17,300 employees. Current reform plans of the Ukrainian government stipulate a reduction of staff by 30% in the foreseeable future. These decreases are mainly linked to budgetary constraints. However, the government has the intention to compensate these losses in human resources by concentrating its efforts on the introduction of electronic processing systems at border crossings and central levels. Customs [6]

52 officers work at 183 border crossing points. There are 27 customs houses and 255 customs clearance offices located all over the country. The SFS UA, contrary to the SCC RB and many other customs services in Europe, does not have investigative powers, since these functions are with the state prosecutors' offices and the State Security Service (SBU). It is important to mention that the SFS UA is a major contributor to the country's state budget Priority areas for support/problem analysis The Belarus-Ukraine border stretches for 1,084 km and runs mainly across a flat land terrain. However, around 250 km run along different rivers like Pripyat, Dnepr and Sozh. There are six railway, nine international road and three river border crossing points (BCPs) as well as 16 border crossing points for local traffic (open only for nationals of Belarus and Ukraine). While trade flows at the Belarusian-Ukrainian border are not as significant as at other borders of the region, in particular from an Ukrainian perspective 2, it is important to mention that the BCP Novaya Huta Novi Yarylovychi is located at branches A and B of the Pan-European (Transport) Corridor IX (Helsinki St. Petersburg Moscow/Pskov/Kaliningrad/Klaipeda Kiev Chisinau Bucharest Dimitrovgrad Alexandropouli). In 2015, 4500 people in 1020 vehicles (cars, busses and trucks) crossed this BCP per day in average with million tons of cargo (figure of 2014), making Novaya Huta Novi Yarylovychi the busiest BCP on the entire Belarusian-Ukrainian frontier. Currently, customs checking of vehicles at the Belarusian-Ukrainian border is being implemented manually. Automation and digitalization of data input in working processes of the customs services of the two countries will not only reduce the number of errors caused by the "human factor" but must also be seen as an effective preventive measure against corruption since the system reduces the number of opportunities for misconduct by state authorities. While there are six BCPs in Belarus equipped with video control installations at the border with Poland and Lithuania, which are not technically linked with the neighbouring countries, the project proposed would introduce an integrated system combining all customs and border guard checking procedures into one for the first time in the beneficiary countries' history. Moreover, the system is expected to reduce significantly processing time. 2 RISKS AND ASSUMPTIONS Risks Corruption spreading among customs officials will undermine the expected results of this actions The counterparts may not fully Risk level (H/M/L) L to M L Mitigating measures An EU-funded Twinning project supports the SFS UA to fight corruption in Ukraine. However, corruption levels in Belarus are lower. Moreover, the basic idea of this project (automation and digitalization of working processes) is an anti-corruption measure in itself. The risk that counterparts may not fully 2 For Ukraine, the most important border as regards arriving and departing goods are the ports in Odessa and Illichivsk. [7]

53 endorse (or take considerable time when endorsing) programme activities Trained personnel may leave project beneficiary institution Assumptions L to M endorse activities is close to zero, not least since the project idea came originally from the two beneficiary countries. The registration of the project might, however, take indeed considerable time, in Belarus in particular. Experience shows that the timely involvement of beneficiaries in project activities is the best way to address this risk. The risk of staff fluctuations in Belarus is low compared to Ukraine where a medium level risk exists. The best way to address this matter is to involve significant numbers of beneficiary representatives in project activities. 1. There is commitment and interest on the part of the two beneficiary countries administrations to share information, harmonise procedures/systems/practices amongst each other in accordance with EU standards and/or project recommendations. 2. The two beneficiary countries will make sufficient numbers of appropriate qualified personnel available for project activities. 3. Project participants of the two beneficiary countries will keep working in their institutions for sufficient time so that the skills and knowledge obtained can be properly applied and transferred to colleagues. 3 LESSONS LEARNT, COMPLEMENTARITY AND CROSS-CUTTING ISSUES 3.1 Lessons learnt Lessons learned from previous assistance provided in both countries include: Assistance in a sensitive area such as border management needs to be developed through a constant and often time-consuming dialogue with beneficiary governments. A regional approach provides coherence and encourages harmonisation of global procedures among beneficiary countries. However, assistance projects have to be tailor-made and needs have to focus on specific requirements of the beneficiary countries, which, about 25 years after the collapse of the Soviet Union, have become very diverse as to their development levels and foreign policy orientation. The provision of equipment has to be linked to training sessions dedicated to the equipment's use and maintenance. Donor assistance needs a mid- to long-term perspective. "One-shot" interventions, implemented over a period of two-three years often lack sustainability. 3.2 Complementarity, synergy and donor coordination Complementarity and synergies [8]

54 Eastern Partnership Integrated Border Management (EaP IBM) Flagship Initiative: Assistance by the European Union or other international donors directed to the border between Belarus and Ukraine, in contrast to the borders of the same countries with EU Member States, has been somewhat scarce. For the time being, there have been only three interventions in recent years which were dedicated explicitly to that border: Under the budget for 2011, the EU allocated EUR 2.6 million for the strengthening of the Belarus-Ukraine "green" border: The 27-month "SURCAP" (Strengthening Surveillance Capacity) project was split into two components - one on training (EUR 0.7 million) and one on equipment (EUR 1.9 million). Implementation took place during the period SURCAP was followed up by a 30-month second phase, which started activities in spring 2014 (EU contribution: EUR 5.1 million). While SURCAP supports the border guards of the two countries, another EaP IBM Flagship Initiative, PRINEX (Pre-Arrival Information Exchange), provides assistance to the customs services. This million euro intervention can be seen as the "sister" of the automated intelligent video-control system project: It will be hooked up to the system established under PRINEX and create therefore significant synergies. PRINEX started activities in spring 2013 and finished in February The present project will be closely coordinated with the regional 3-year Eastern Partnership Integrated Border Management Capacity Building Project, which started activities in July 2014 (budget: EUR 4.48 million). It is implemented by Frontex in partnership with WCO, IOM, UNHCR and ICMPD. Activities take place in the six Eastern Partnership countries and are focused on trainings and study visits which, inter alia, support the beneficiary countries' implementation of the concept of integrated border management in their national system, the strengthening of training capacities and fight against corruption. It does not provide for any investments in equipment or infrastructure. The EU-funded EUBAM programme (European Border Assistance Mission) for Moldova and Ukraine has been supporting improvement in border management standards in Moldova and Ukraine by providing technical input, inter alia, for the settlement process of the Transnistrian conflict since late This project in the area of freedom, security and justice was commended in a Court of Auditors report as contributing greatly to building capacity in the Moldovan and Ukrainian border guard and customs services. EUBAM has made recommendations on legislative and structural reform of the customs and border guard services. The EU financed several projects under the Cross-Border Cooperation Programmes "Poland-Belarus-Ukraine" and "Latvia-Lithuania-Belarus" ( ), in the framework of which five major interventions (mainly reconstruction of border crossing points) worth approximately EUR million in total have been financed in Belarus during the years In Ukraine, three Cross Border Cooperation Programmes ( ) are currently operational. For the first one the Poland-Ukraine-Belarus programme many large-scale projects concern border management. These projects are estimated to amount to approximately EUR million in total. The implementation of other large-scale projects in the framework of the Romania-Moldova-Ukraine programme and the Hungary-Slovakia- Romania-Ukraine programmes are expected to finish activities before the end of It is noteworthy that the EC has started drafting the next round of 7-year strategies on the CBC programmes. It is likely that they will include support measures for agencies working on the state border. However, it is also likely that the focus will not be on activities at the Belarus- Ukraine border, making the EaP IBM Flagship Initiative the only EU-funded programme which directs assistance to that frontier. [9]

55 Under the ENPI 2010 Annual Action Programme for Ukraine, the European Commission signed a EUR 60 million Sector Policy Support Programme in the field of border management, in particular of the Integrated Border Management (IBM) strategy (implementation period: ). As complementary measures, a Twinning project for the State Border Guards Service and one for the Customs were funded. Also, several supply contracts for both the customs and the border guards are being implemented at the moment. Frontex has bilateral working arrangements on the establishment of operational cooperation with the relevant authorities of Belarus and Ukraine. According to these arrangements, cooperation focuses geographically on external EU borders and thematically on the exchange of information & experience, risk analysis, joint operations, training, joint activities and secondment of border guards to EU Member States units responsible for border control. Frontex does not provide equipment to the two beneficiary countries. It is expected that the two beneficiary countries will contribute EUR 72,600 (Belarus) and EUR 75,000 (Ukraine) to the strengthening of the Belarus-Ukraine border outside the agreement to be signed with IOM. Donor coordination The specific political circumstances in Belarus have resulted in a quasi-monopoly position of the European Commission with regard to the State Customs Committee. Assistance activities by other donors in this particular area are very limited and scarce. The only international organisations, which are active in this field and permanently present in Belarus, are the International Organisation for Migration (IOM) and the UNDP, which both mostly implement EC-funded projects. It should be noted, though, that also Russia provides significant aid to both services but its extent is very difficult to assess. As regards border management, the U.S. is the only major active donor, apart from the EU, in Ukraine. Close cooperation and coordination of activities are taking place on a permanent basis to ensure synergy effects. Coordination with beneficiaries and donors is also achieved through the EUBAM Advisory Board and bi-annual EUBAM Coordination meetings on Border Management Training. Moreover, the EU Delegation in Kiev has regular consulting meetings with other main actors, such as IOM, UNHCR and the customs liaison officers in EU embassies. A new mechanism for coordination in the field of civilian security sector reform under the lead of the EU Assistance Mission to Ukraine has been recently initiated (biannual Border Management Assistance Group meetings). 3.3 Cross-cutting issues Good governance: The project is expected to be based on good governance principles ("ownership" and "fighting corruption" in particular). Through the organisation of numerous coordination meetings between beneficiaries, it will promote the dialogue between different levels of the two state administrations involved. Moreover, it will help strengthen the partner countries' capacities to better deal with the management of international borders in line with European best practice. Environment: The project is expected to reduce waiting time of trucks, busses and private cars, which will have a positive impact on the nature adjacent to BCP Novaya Huta Novi Yarylovychi (reduced levels of car exhaust fumes and litter). Gender: The system to be installed and hooked up to PRINEX might help officers working at the border fight the problem of human trafficking. [10]

56 The expected long-term impact is to contribute to the strengthening of good neighbourly relations as well as the facilitation of trade and migration flows. 4 DESCRIPTION OF THE ACTION 4.1 Objectives/results Overall Objectives - To help improve international cooperation between the customs and border guard services of the two beneficiary countries - To help beneficiary countries increase levels of legal trade, tourism and, as a consequence, tax revenue - To contribute to the enhancement of security levels at the Belarusian-Ukrainian border Project Purpose - To help increase efficiency and effectiveness of the work of the Belarusian and Ukrainian customs and border guard services working at road border crossing point Novaya Huta Novi Yarylovychi Results - Time needed to carry out customs and border guard formalities for travellers and trucks at the three border crossing points reduced - Capacities of the countries to prevent and fight cross-border crimes at the border crossing point enhanced - Number of attempts to smuggle illicit goods at the border crossing point reduced - Conditions for free movement of persons, goods and means of transport at the border crossing point improved - Due to shorter vehicle queues and waiting time, environmental situation in the areas adjacent to the border crossing point improved 4.2 Main activities - Organisation of expert-level coordination meetings by IOM for Belarus and Ukraine customs and border guard agencies through the whole project implementation period (i) to guarantee coherence in system development as well as soft- and hardware compatibility on both sides of the border and (ii) to ensure a simultaneous execution pace in both countries; this process will be accompanied also by an external expert under IOM contract - Identification and recruitment of procurement (technical specifications) and IT experts by IOM - Assessment of Belarusian and Ukrainian equipment and infrastructure needs, to be coordinated with both beneficiary countries and carried out in Minsk and Kyiv (agencies' headquarters) as well as at the Novaya Huta Novi Yarylovychi BCP by external expert under IOM contract - Elaboration of technical specifications on IP (internet protocol) cameras and equipment for recognising vehicle number plates by external expert under IOM contract - Organisation of the tender, procurement of the equipment, supervision of its installation by IOM - Development of the terms of reference for the procurement of software in close coordination with the beneficiaries to ensure compatibility with the system established [11]

57 under the PRINEX project and with other IT systems already in place by external expert under IOM contract - Procurement of the software by IOM - After installation of equipment, provision of expertise before system launch, including testing and fine-tuning of relevant national software modules as well as testing of the updated PRINEX system in both beneficiary countries to ensure operational stability by equipment supplier and an external expert under IOM contract - Organisation of end-user and system administrator trainings for customs and border guards staff working at the BCP by IOM with the involvement of an external expert under IOM contract - Organisation of visibility event by IOM 4.3 Intervention logic This project is about the procurement of equipment, accompanying training on its use as well as the provision of expertise before, during and after installation/launch of the video-control system. The equipment will be installed at the road border crossing point (BCP) Novaya Huta Novi Yarylovychi which is the busiest BCP along the entire Belarusian-Ukrainian frontier. Further, this BCP is located at the Pan-European Corridor IX. Due to the significant distance between the vehicle checking installations of the two beneficiary countries (they are separated by about two kilometres), it is considered being a high risk BCP susceptible to illegal actions when goods and vehicles are moved from one checking point to the other. The proposed automated intelligent video-control system would have pilot character to be rolled out at the entire Belarusian-Ukrainian border. Currently, neither Ukraine nor Belarus have a similar system in place. It is noteworthy that Belarus has the intention to establish a similar system also at its border with EU Member States. The automated video-control system will be based on the PRINEX project an electronic information exchange network established to send details such as weight and type of goods transported to the customs of the neighbouring country prior to the arrival of a vehicle on the other side of the border. The proposed video system will be hooked up to PRINEX and provide the number plate, the country of registration, the vehicle make, the number of persons in the vehicle 3 and an image of the vehicle to the customs and border guard services on both sides of the frontier by automatically scanning the plates and photographing vehicles when they approach the video-control system, which will be installed at the entrance of the border crossing point immediately before the first boom barrier operated by a border guard. All data collected electronically will be released and made accessible for the neighbouring country's services by the responsible border guard as soon as a vehicle has passed the last boom barrier on one side of the border. An earlier release would not make sense since the electronic PRINEX system is fed with data throughout the whole checking process starting with the data produced by the video-control system, continuing with the border guard (at the boom barrier and later at the BCP itself) and customs (including the weighing of trucks) checks. Any electronic data on vehicles is being transferred to the neighbouring country's checkpoints via Minsk and Kyiv in real-time mode. 3 The date on the vehicle make and the number of persons will be manually fed into the system by the border guard at the first boom barrier. [12]

58 In Belarus, the SCC has plans to store all data in its central server in Minsk for one year, which is the typical period for keeping the hard copy customs declarations. 4 As soon as the new electronic system is in place, the hard copy declarations on the vehicles and travellers, which the responsible border guard fills in at the first boom barrier currently by hand, will be abolished. 5 IMPLEMENTATION 5.1 Financing agreement In order to implement this action, it is not foreseen to conclude a financing agreement with the partner countries, referred to in Article 184(2)(b) of Regulation (EU, Euratom) No 966/ Indicative implementation period The indicative operational implementation period of this action, during which the activities described in section 4.2 will be carried out and the corresponding contracts and agreements implemented, is 48 months from the date of adoption by the Commission of this Action Document. Extensions of the implementation period may be agreed by the Commission s authorising officer responsible by amending this decision and the relevant contracts and agreements; such amendments to this decision constitute technical amendments in the sense of point (i) of Article 2(3)(c) of Regulation (EU) No 236/ Implementation modalities Indirect management with an international organisation This action may be implemented in indirect management with the International Organization for Migration (IOM) in accordance with Article 58(1)(c) of Regulation (EU, Euratom) No 966/2012. This implementation encompasses the introduction of an automated intelligent video-control system as described in section 4 above. The implementation through IOM is justified for the following reasons: - There are very few other international organisations which are physically present in both beneficiary countries (none of them have specific expertise in customs projects); - IOM can build on its long-term relationship with project beneficiaries, something that is particularly important when working with law enforcement agencies in Belarus; - Procurement of equipment will not take place at the beginning of the project but will start in the second half of its implementation period, since the project needs a lot of coordination and harmonisation between the two beneficiary countries at technical and regulative levels before procurement can be launched a rather complicated process which will need to be accompanied and closely supervised by IOM's consultants in a flexible manner; - IOM has significant experience in supporting governments in related areas such as data management; 4 It is important to mention that a study on Belarus' and Ukraine's data protection regimes in 2015 concluded that while "there are several elements of data protection existent in the legal system of the Republic of Belarus, they do not afford a level of protection which is in any way comparable to EU standards" («Comparison of the Data Protection Provisions in the Legislation of the Republic of Belarus and Ukraine vis-à-vis the Regulations in the Schengen/Visa Information System», ENI/2015/ ). [13]

59 - Prior experience and very good performance of IOM in a similar project under the EaP IBM Flagship Initiative implemented in (PRINEX): this Action will have to be hooked up to PRINEX and feed data into the electronic data processing system already established; - Very good performance of IOM in other projects under the EaP IBM Flagship Initiative implemented in (SURCAP and SURCAP Phase 2); - It is planned that project activities will start soon after the adoption of the Financing Decision; due to IOM's extensive experience in implementing projects in Belarus, project registration procedures with the Ministry of Economy, which are rather complicated and time-consuming, will not significantly delay the project start. The entrusted entity would carry out the following budget-implementation tasks: recruitment of external experts, running the public procurement, concluding and managing the resulting contracts, including making of the related payments. The entrusted international organisation has successfully passed the ex-ante assessment in Accordance with Article 61(1) of Regulation (EU, Euratom) No 966/ Scope of geographical eligibility for procurement and grants The geographical eligibility in terms of place of establishment for participating in procurement and grant award procedures and in terms of origin of supplies purchased as established in the basic act and set out in the relevant contractual documents shall apply. The Commission s authorising officer responsible may extend the geographical eligibility in accordance with Article 9(2)(b) of Regulation (EU) No 236/2014 on the basis of urgency or of unavailability of products and services in the markets of the countries concerned, or in other duly substantiated cases where the eligibility rules would make the realization of this action impossible or exceedingly difficult. 5.5 Indicative budget Indirect management with the International Organisation for Migration (IOM) EU contribution (amount in EUR) Indicative third party contribution (amount in EUR) Parallel co-financing by Belarus Parallel co-financing by Ukraine Totals The financial commitments made by the beneficiary countries (parallel cofinancing) will finance the construction documentation development, its certification, construction works, scales and the lightning conductor systems. [14]

60 5.6 Organisational set-up and responsibilities A Steering Committee will be set up to oversee and validate the overall direction and policy of the project (or other responsibilities to be specified) and will be convened twice a year. The project steering committee shall be made up of representatives of the Beneficiary countries, of the entrusted entity (IOM), of the Delegations of the European Union to the Republic of Belarus and Ukraine. 5.7 Performance monitoring and reporting The day-to-day technical and financial monitoring of the implementation of this action will be a continuous process and part of the implementing partner s responsibilities. To this aim, the implementing partner shall establish a permanent internal, technical and financial monitoring system for the action and elaborate regular progress reports (not less than annual) and final reports. Every report shall provide an accurate account of implementation of the action, difficulties encountered, changes introduced, as well as the degree of achievement of its results (outputs and direct outcomes) as measured by corresponding indicators, using as reference the log frame matrix. The report shall be laid out in such a way as to allow monitoring of the means envisaged and employed and of the budget details for the action. The final report, narrative and financial, will cover the entire period of the action implementation. The Commission may undertake additional project monitoring visits both through its own staff and through independent consultants recruited directly by the Commission for independent monitoring reviews (or recruited by the responsible agent contracted by the Commission for implementing such reviews). 5.8 Evaluation Having regard to the importance of the action, an ex-post evaluation will be carried out for this action via independent consultants contracted by the Commission. It will be carried out for accountability and learning purposes at various levels (including for policy revision), taking into account in particular the fact that significant numbers of equipment has been delivered to beneficiary countries in the past. The Commission shall inform the implementing partner at least one month in advance of the dates foreseen for the evaluation missions. The implementing partner shall collaborate efficiently and effectively with the evaluation experts, and inter alia provide them with all necessary information and documentation, as well as access to the project premises and activities. The evaluation report shall be shared with the partner country and other key stakeholders. The implementing partner and the Commission shall analyse the conclusions and recommendations of the evaluations and, where appropriate, in agreement with the partner country, jointly decide on the follow-up actions to be taken and any adjustments necessary, including, if indicated, the reorientation of the project. The provisions of the Framework Administrative Agreement concluded between the European Commission and IOM shall apply where relevant. The financing of the evaluation shall be covered by another measure constituting a financing decision. [15]

61 5.9 Audit Without prejudice to the obligations applicable to contracts concluded for the implementation of this action, the Commission may, on the basis of a risk assessment, contract independent audits or expenditure verification assignments for one or several contracts or agreements. The provisions of the Framework Administrative Agreement concluded between the European Commission and IOM shall apply where relevant. The financing of the audit shall be covered by another measure constituting a financing decision Communication and visibility Communication and visibility of the EU is a legal obligation for all external actions funded by the EU. The 100% funding of the Action will ensure full EU visibility.this action shall contain communication and visibility measures which shall be based on a specific Communication and Visibility Plan of the Action, to be elaborated at the start of implementation. In terms of legal obligations on communication and visibility, the measures shall be implemented by the Commission, the partner country, contractors, grant beneficiaries and/or entrusted entities. Appropriate contractual obligations shall be included in, respectively, the procurement contracts and delegation agreements. The Communication and Visibility Manual for European Union External Action shall be used to establish the Communication and Visibility Plan of the Action and the appropriate contractual obligations. Communication and visibility expenditure will be financed under the budget of the Delegation Agreement. [16]

62 Overall objective: Impact APPENDIX - INDICATIVE LOGFRAME MATRIX (FOR PROJECT MODALITY) The activities, the expected outputs and all the indicators, targets and baselines included in the logframe matrix are indicative and may be updated during the implementation of the action, no amendment being required to the financing decision. When it is not possible to determine the outputs of an action at formulation stage, intermediary outcomes should be presented and the outputs defined during inception of the overall programme and its components. The indicative logframe matrix will evolve during the lifetime of the action: new lines will be added for including the activities as well as new columns for intermediary targets (milestones) for the output and outcome indicators whenever it is relevant for monitoring and reporting purposes. Note also that indicators should be disaggregated by sex whenever relevant. Intervention logic Indicators Baselines (incl. reference year) To help improve international cooperation between the customs and border guard services of the two beneficiary countries To help beneficiary countries increase levels of legal trade, tourism and, as a consequence, tax revenue To contribute to the enhancement of security levels at the Belarusian- Ukrainian border Number of cases of legitimate border crossings (traders, tourists) at the border crossing point increased Customs fee collection at the border crossing point increased Number of contacts between the customs services of the two countries increased Number of agreements achieved between the customs services of the two countries increased Number of violations of the border legislation of the two countries dropped For all indicators: reference year 2016 (exact figure to be established by baseline study at the beginning of the project) Targets (incl. reference year) For all indicators: reference year 2018 For the first, second and fifth indicators: Increase of 5% For the third and fourth indicator: any increase of contacts and agreements facilitated by the project Sources and means of verification Operative customs services reports, official statistics, periodic customs services reports, internet media websites, baseline study N/A Assumptions [17]

63 Specific objective(s): Outcome(s) To help increase efficiency and effectiveness of the work of the Belarusian and Ukrainian customs and border guard services working at road border crossing point Novaya Huta Novi Yarylovychi Equipment procured, technically linked to existing systems of the two beneficiary countries and in use Baseline study at the beginning of the project describing situation in reference year 2016 Delivery of equipment as described in section 4 in 2018 Baseline study, tender documentation, media reports reporting on the public handover of the equipment, operative customs services reports There is commitment and interest on the part of the two beneficiary countries administrations to share information, harmonise procedures / systems / practices amongst each other in accordance with EU standards and/or project recommendations [18]

64 Outputs Time needed to carry out customs and border guard formalities for travellers and trucks at the border crossing point reduced Capacities of the countries to prevent and fight cross-border crimes at the border crossing point enhanced Number of attempts to smuggle illicit goods at the border crossing point reduced Conditions for free movement of persons, goods and means of transport at the border crossing point improved Due to shorter vehicle queues and waiting time, environmental situation in the areas adjacent to the border crossing point improved Time recorded for crossing the border crossing point by travellers and trucks Delivery of the equipment Number of cases, and amounts, of smuggled goods Weight of rubbish dumped along the road leading to the border crossing point reduced Baseline study at the beginning of the project describing situation in reference year 2016 Full delivery of equipment as described in section 4 in 2018 Baseline study, tender documentation, media reports reporting on the public handover of the equipment, operative customs and services reports The two beneficiary countries will make sufficient numbers of appropriate qualified personnel available for project activities. Project participants of the two beneficiary countries will keep working in their institutions for sufficient time so that the skills and knowledge obtained can be properly applied and transferred to colleagues. [19]

65 This action is funded by the European Union ANNEX 3 of the Commission Implementing Decision on the ENI East Regional Action Programme 2016 and 2017, Part I Action Document for ENI East Global Allocation 2016 INFORMATION FOR POTENTIAL GRANT APPLICANTS WORK PROGRAMME FOR GRANTS This document constitutes the work programme for grants in the sense of Article 128(1) of the Financial Regulation (Regulation (EU, Euratom) No 966/2012) in section concerning calls for proposals. 1. Title/basic act/ CRIS number 2. Zone benefiting from the action/location 3. Programming document 4. Sector of concentration/ thematic area 5. Amounts concerned ENI East Global Allocation 2016 CRIS number: ENI/2016/ financed under European Neighbourhood Instrument ENI East countries, including the Russian Federation. The action shall be carried out at the following location: ENI East countries, including Russia, and in Commission Headquarters in Brussels. Programming of the European Neighbourhood Instrument (ENI) Regional East Strategy Paper ( ) and Multiannual Indicative Programme ( ). Multisector aid Total estimated cost: EUR Total amount of EU budget contribution EUR Aid modality(ies) and implementation modality(ies) This action is co-financed by potential grant beneficiaries for an indicative amount of EUR Project Modality Direct management: grants call for proposal; procurement of services and supplies 7. DAC code(s) multisector aid [1]

66 8. Markers (from CRIS DAC form) 9. Global Public Goods and Challenges (GPGC) thematic flagships General policy objective Not targeted Significant objective Main objective Participation development/good governance Aid to environment Gender equality (including Women In Development) Trade Development Reproductive, Maternal, New born and child health RIO Convention markers Not targeted Significant objective Main objective Biological diversity Combat desertification Climate change mitigation Climate change adaptation N/A. SUMMARY The ENI East Global Allocation is a Support Measure giving the European Commission a possibility to fund activities, including small-scale activities, in line with the objectives of the Eastern dimension of the European Neighbourhood Instrument (ENI) as well as its operational and policy priorities. 1 CONTEXT 1.1 Thematic area Multisector aid: Support to the project cycle management and information and communication activities Public Policy Assessment and EU Policy Framework The Global Allocation programme is in line with the ENI Regional East Strategy ( ) and Multiannual Indicative Programme ( ) 1, which states in paragraph 7.4. Horizontal and sectoral support: "Support for identification and formulation of programmes as well as information and communication activities as defined in Article 3 of Regulation 236/2014 (Common Implementing Rules) which refers to support measures, may be provided." The Regulation 236/2014 laying down common rules and procedures for the Union s instruments for financing external action (CIR) 2 states under Article 3, Support measures: 1 C(2014) [2]

67 1. "Union financing may cover expenditure for the implementation of the Instruments and for the achievement of their objectives, including administrative support associated with the preparation, follow-up, monitoring, audit and evaluation activities directly necessary for such implementation, as well as expenditure at Union delegations on the administrative support needed to manage operations financed under the Instruments." Stakeholder analysis The action is designed to support preparation, monitoring and follow-up of the EU cooperation programmes and activities in the field of information and communication by the EU Delegations in the Neighbourhood East countries and Russian Federation, and by the Commission headquarters. The end beneficiaries are citizens in the partner countries, as projects will be better prepared, monitored, followed up, and citizens will be informed about EU-funded initiatives and projects Priority areas for support/problem analysis Support for the project cycle management such as preparation, monitoring and follow-up of programmes, and activities in the field of information and communication. The EU Delegations and the Commission services benefitting from the Global Allocation can utilise the funds for support activities for the project cycle management and information and communication purposes related to ENI and other EU funded/supported programmes and activities. 2 RISKS AND ASSUMPTIONS Risks Risk level (H/M/L) N/A N/A N/A Assumptions Mitigating measures Given the experience from the ENPI and ENI Global Allocation funding of the previous years, it is confirmed that there is a genuine need for this flexible instrument supporting the project cycle management and information and communication activities. 2 Regulation (EU) No 236/2014 of the European Parliament and of the Council of 11 March 2014 laying down common rules and procedures for the implementation of the Union's instruments for financing external action. OJ L 77, , p. 95. [3]

68 3 LESSONS LEARNT, COMPLEMENTARITY AND CROSS-CUTTING ISSUES Given the support nature of previous and current Global Allocations, past actions are assessed against the consumption level of committed funds in the previous years. This is one of the criteria, along with priorities and needs, taken into account in the initial programming, as well as in the planning exercise once the Decision is adopted. The yearly recurrent need for the Global Allocation has proven that there is genuine need for this instrument as a flexible supporting tool. The Global Allocation can be considered as a complementary action to the technical assistance allocations existing in the frame of the Single Support Frameworks. Global Allocation for EU Delegation information activities in the region will be complementary to the activities financed from the budget line Information outreach on the Union's external relations. Cross-cutting issues as such are not directly built into the Global Allocation. They are nevertheless built into the EU funded projects and other activities that the Global Allocation supports. 3.1 Lessons learnt See above. 3.2 Complementarity, synergy and donor coordination As regards complementarity and synergy, see above. Donor coordination is not relevant to an internal supporting tool for the Commission Services in EU Delegations and the Headquarters. 3.3 Cross-cutting issues See above. 4 DESCRIPTION OF THE ACTION 4.1 Objectives/results The objective of the ENI East Global Allocation is to support the project management cycle in the Eastern Neighbourhood such as preparation, follow-up and monitoring of programmes, Eastern Partnership flagships, and activities in the field of information and communication. The Russian Federation may also benefit from the action. 4.2 Main activities The ENI East Global Allocation will be used to finance activities in the following two fields: Component 1 - Support to project cycle management and monitoring: - Identification and formulation of projects that may result in funding from ENI East (e.g. sector studies, country or region studies, studies on horizontal and cross-cutting issues or in specialised areas, preparatory activities etc.) as well as their follow-up and monitoring; [4]

69 - Other small-scale activities to back up or complement major projects during their implementation; - Audits, evaluations and impact assessment of projects for which financing of such activities could not be foreseen due to the N+1 rule, or is no longer available. Component 2 - Information and communication activities: - Information and communication activities to (i) raise awareness and visibility of the EU, the European Neighbourhood Policy and the Eastern Partnership; (ii) to enhance the visibility of EU-funded activities; and (iii) to improve the understanding of EU cooperation policies in the ENI East region. 4.3 Intervention logic The utilisation of the Global Allocation funds by the EU Delegations in the ENI countries and the Russian Federation as well as the relevant Commission services depends on needs arising in the project cycle management, follow-up and monitoring needs, and information and communication activities arising throughout the year. Each beneficiary EU Delegation and unit makes its initial annual plan for using the Global Allocation funds in the beginning of the year, and the plan is updated throughout the year when need occurs. 5 IMPLEMENTATION 5.1 Financing agreement In order to implement this action, it is not foreseen to conclude a financing agreement with the partner countries referred to in Article 184(2)(b) of Regulation (EU, Euratom) No 966/ Indicative implementation period The indicative operational implementation period of this action, during which the activities described in section 4.2 will be carried out and the corresponding contracts and agreements implemented, is 60 months from the date of adoption by the Commission of this Action Document. Extensions of the implementation period may be agreed by the Commission s authorising officer responsible by amending this decision and the relevant contracts and agreements; such amendments to this decision constitute technical amendments in the sense of point (i) of Article 2(3)(c) of Regulation (EU) No 236/ Implementation modalities The programme will be implemented through direct management using both grants and procurement contracts. The ENI East Global Allocation is a Support Measure in the meaning of Article 3 of Regulation (EU) No 236/2014. It is meant to react with flexibility to evolving circumstances and unforeseen situations. Therefore, the separation of amounts and number of contracts is provisional and indicative. Numbers are based on previous years experience Grants: call for proposals (direct management) (a) Objectives of the grants, fields of intervention, priorities of the year and expected results [5]

70 The objective of the grants is to ensure preparation and follow-up of actions and projects by giving support to project cycle management, studies and information activities and organisation of meetings and training activities. (b) Eligibility conditions As foreseen in Regulation (EU) No 236/2014. (c) Essential selection and award criteria The essential selection criteria are financial and operational capacity of the applicant. The essential award criteria are relevance of the proposed action to the objectives of the call; design, effectiveness, feasibility, sustainability and cost-effectiveness of the action. (d) Maximum rate of co-financing The maximum possible rate of co-financing for grants under this call is up to 95%. In accordance with Article 192 of Regulation (EU, Euratom) No 966/2012, if full funding is essential for the action to be carried out, the maximum possible rate of co-financing may be increased up to 100 %. The essentiality of full funding will be justified by the Commission s authorising officer responsible in the award decision, in respect of the principles of equal treatment and sound financial management. (e) Indicative timing to launch the call 4 th quarter of 2016 / 1 st quarter of Procurement (direct management) Subject Type Indicative number of contracts Indicative trimester of launch of the procedure Ensure preparation, implementation, monitoring and follow-up operations of actions and projects Information and communication activities services supplies Up to 50 Throughout 2016 and Scope of geographical eligibility for procurement and grants The geographical eligibility in terms of place of establishment for participating in procurement and grant award procedures and in terms of origin of supplies purchased as established in the basic act and set out in the relevant contractual documents shall apply. The Commission s authorising officer responsible may extend the geographical eligibility in accordance with Article 9(2)(b) of Regulation (EU) No 236/2014 on the basis of urgency or of unavailability of products and services in the markets of the countries concerned, or in other duly substantiated cases where the eligibility rules would make the realisation of this action impossible or exceedingly difficult. [6]

71 5.5 Indicative budget Component Support for project cycle management, monitoring and follow-up of projects Amount in EUR Information and communication activities TOTAL Module Amount in EUR Indicative third party contribution Grants (direct management) Procurement (direct management) Totals Organisational set-up and responsibilities The EU Delegations and Commission services benefiting from the Global Allocation will prepare after the approval of this Commission Decision an initial plan for the utilisation of the Global Allocation funds for They are responsible for the contracting of the funds. 5.7 Performance monitoring and reporting The day-to-day technical and financial monitoring of the implementation of this action will be a continuous process and part of the implementing partners' responsibilities. To this aim, the implementing partners shall establish a permanent internal, technical and financial monitoring system for the action and elaborate regular progress reports (not less than annual) and final reports. Every report shall provide an accurate account of implementation of the action, difficulties encountered, changes introduced, as well as the degree of achievement of its results (outputs and direct outcomes) as measured by corresponding indicators, using as reference the logframe matrix. The report shall be laid out in such a way as to allow monitoring of the means envisaged and employed and of the budget details for the action. The final report, narrative and financial, will cover the entire period of the action implementation. The Commission may undertake additional project monitoring visits both through its own staff and through independent consultants recruited directly by the Commission for independent monitoring reviews (or recruited by the responsible agent contracted by the Commission for implementing such reviews). A mid-year and other periodical updates will be carried out to assess the level of contracting of funds as well as to update the planned needs, if necessary. In addition, regular exchange of information between headquarters and EU Delegations will be assured. [7]

72 5.8 Evaluation The Commission may, during implementation, decide to undertake an evaluation of this action or its components for duly justified reasons either on its own decision or on the initiative of the partner(s). Where relevant evaluation reports shall be shared with the partner countries and other key stakeholders. The implementing partner(s) and the Commission shall analyse the conclusions and recommendations of the evaluations and, where appropriate, in agreement with the partner country(ies), jointly decide on the follow-up actions to be taken and any adjustments necessary, including, if indicated, the reorientation of the project(s). The financing of the evaluation shall be covered by another measure constituting a financing decision. 5.9 Audit Without prejudice to the obligations applicable to contracts concluded for the implementation of this action, the Commission may, on the basis of a risk assessment, contract independent audits or expenditure verification assignments for one or several contracts or agreements. The financing of the audit shall be covered by another measure constituting a financing decision Communication and visibility Communication and visibility of the EU is a legal obligation for all external actions funded by the EU. This action shall contain communication and visibility measures which shall be based on a specific Communication and Visibility Plan of the Action, to be elaborated at the start of implementation and supported with the budget indicated in section 5.55 above. In terms of legal obligations on communication and visibility, the measures shall be implemented by the Commission, the partner countries, contractors and/or grant beneficiaries. Appropriate contractual obligations shall be included in the procurement and grant contracts. The Communication and Visibility Manual for European Union External Action 3 shall be used to establish the Communication and Visibility Plan of the Action and the appropriate contractual obligations. Moreover, communication and information activities are an integral part of the present action, aiming at an enhanced visibility and better understanding of EU-funded activities in the Eastern neighbourhood. 3 [8]

73 APPENDIX - INDICATIVE LOGFRAME MATRIX The activities, the expected outputs and all the indicators, targets and baselines included in the logframe matrix are indicative and may be updated during the implementation of the action without an amendment to the Financing Decision. The indicative logframe matrix will evolve during the lifetime of the action: new lines will be added for listing the activities as well as new columns for intermediary targets (milestones) when it is relevant and for reporting purpose on the achievement of results as measured by indicators. Intervention logic Indicators Baselines Targets Sources and means of verification Assumptions Overall objective: Impact Project management cycle in the Eastern Neighbourhood such as preparation, monitoring and followup of programmes, and activities in the field of information and communication supported. EU Delegations and benefitting Commission services report on positive support their activities have received from the Global Allocation funding. Better quality of newly prepared programme documents, higher quality of evaluation and appraisal of projects and programmes. Better monitoring and followup of programmes. N/A N/A Reporting from the EU Delegations and Commission services. N/A Better visibility of EU funded programmes and EU policies in partner countries. [9]

74 Specific objectives: outcomes Projects funded from ENI East (e.g. sector studies, country or region studies, studies on horizontal and cross-cutting issues or in specialised areas, preparatory activities, etc.) identified and formulated. Monitoring and follow-up of the projects undertaken. Other small-scale activities to back up or complement major projects during their implementation undertaken. Audits, evaluations and impact assessment of projects for which financing of such activities could not be foreseen due to the N+1 rule, or is no longer available funded. Information and communication activities to (i) raise awareness and visibility of the EU, the European Neighbourhood Policy and the Eastern Partnership; (ii) to enhance the visibility of EU-funded activities; and (iii) to improve the understanding of EU cooperation policies in the ENI East region implemented. Number of ENI projects whose project cycle management is supported by the Global Allocation funds. Number of projects monitored and followed-up. Number of information and communication activities organised. N/A N/A CRIS, EAMR reports of EU Delegations, mid-year budget reporting from Global Allocation beneficiaries. N/A Outputs Project cycle management of ENI projects supported Information and communication activities undertaken. N/A. Up to 50 contracts committed and implemented. Number of contracts committed and finalised until the end of the implementation period of the decision. N/A. [10]

75 This action is funded by the European Union ANNEX 4 of the Commission Implementing Decision on the ENI East Regional Action Programme 2016 and 2017, Part I Action Document for Eastern Partnership Integrated Border Management Flagship Initiative: enhanced integrated border management through joint border control and exchange of information along the Moldovan-Ukraine border 1. Title/basic act/ CRIS number 2. Zone benefiting from the action/location Eastern Partnership Integrated Border Management Flagship Initiative: enhanced integrated border management through joint border control and exchange of information along the Moldovan-Ukraine border CRIS number: ENI/2016/ financed under European Neighbourhood Instrument Eastern Europe Region, Ukraine and Moldova The action shall be carried out at the following locations: Border Crossings: Reni, Kuchurhan and Palanca. 3. Programming document 4. Sector of concentration/ thematic area Regional East Strategy Paper ( ) and Multiannual Indicative Programme ( ) Integrated Border Management 5. Amounts concerned Total estimated cost: EUR Aid modality(ies) and implementation modality(ies) Total amount of EU budget contribution: EUR Parallel co-financing by Ukraine and Moldova: EUR Project Modality Indirect management with the International organization for Migration (IOM) 7 a) DAC code(s) Security system management and reform Trade facilitation b) Main Delivery Channel 8. Markers (from CRIS DAC form) International Organization for Migration General policy objective Not targeted Significant objective Main objective Participation development/good X governance Aid to environment X Gender equality (including Women X In Development) Trade Development X Reproductive, Maternal, New born and child health X [1]

76 9. Global Public Goods and Challenges (GPGC) thematic flagships RIO Convention markers Not targeted Significant objective Main objective Biological diversity X Combat desertification X Climate change mitigation X Climate change adaptation X Integrated Border Management Flagship Initiative SUMMARY This initiative aims to further enhance integrated border management between the Republic of Moldova 1 and Ukraine by encouraging joint border control at border crossing points and information sharing between agencies from both countries. Following years of discussions facilitated by the European Border Assistance Mission to Moldova and Ukraine (EUBAM), Moldova and Ukraine signed two key agreements in Chisinau in November 2015, one covering data transmission on passengers and vehicles crossing the border and one foreseeing the establishment of joint Moldova-Ukraine border controls and customs in Kuchurgan, located on the border between the two countries, in the Ukrainian territory, on the Transnistrian segment of the border. Successively the two partner countries claimed to lack the budget and the necessary know-how to make such agreements operational within a year of the agreements, as foreseen in the documents, and requested the EU to support the process. Requests for funding were prepared following the standard procedures foreseen in the context of the Eastern Partnership Panels on Integrated Border Management and were approved. Availing the assistance of the International Organization for Migration (IOM) and the EUBAM, as well as the United Nations Development Programme (UNDP) who used to manage the EUBAM and is managing the construction of the joint border crossing point in Palanca, the two countries developed an unprecedented level of cooperation in the recent past which would be further encouraged through this ambitious initiative. In addition to the two components mentioned above (Kuchurgan and data transmission), the initiative foresees establishment of a joint 'Contact Point' in the site of Palanca and an upgrade of the Border Crossing Point Reni-Giurgiulesti which will allow all controls to be done jointly on the Ukrainian side rather than through two separate locations as it currently happens and at the same time the project would allow a significant upgrade of the infrastructure and equipment, allowing safe and efficient controls according to the European standards. Quality of implementation will be ensured by the IOM who will, with support of the EUBAM mission, thanks to their solid presence on the territory in the past few years, conduct the necessary procurement of supplies, work and services to ensure that the partner countries have all necessary tools to implement successfully the agreements developed with EU support. 1 Hereinafter referred to as Moldova. [2]

77 The key beneficiaries are the Moldovan Border Police and Customs as well as the Ukrainian Border Guards and State Fiscal Service in charge of Customs. 1 CONTEXT 1.1 Sector/Country/Regional context/thematic area The Moldova-Ukraine State Border is 1,222 km long, consisting of 955 km of green border and 267 km of blue border. There are 67 official crossing points, including international, inter-state and local ones km of this border on the Moldovan side is under control of the so-called Transnistrian authorities, including 25 official crossing points to Ukraine (5 international, 8 inter-state, 12 local). Ukraine and Moldova encountered similar development challenges, such as political instability, limited economic growth, demise of socio-economic infrastructure, corruption, just to name a few. The general pattern of cross-border crimes has not changed. Illegal movement of goods, including excise goods, is defined as the key challenge for the border services at the Moldova-Ukraine border. Both price differentials across Moldova and Ukraine's markets and profits emerging from tax and duties evasion create strong incentives for smuggling of tobacco, alcohol and foodstuffs, particularly along the Transnistrian sector of the common border. The internal boundary between the Transnistrian region and Chisinau authorities/ controlled territory has a continued Russian military presence ( peacekeeping forces ) and is not monitored by Moldovan border police, due to its administrative character. The State border with Ukraine along the Transnistrian segment is not under the control of Chisinau authorities; internationally recognised control and protection functions are only conducted by the State Border Guard Service of Ukraine at international border crossing points (BCPs) as well the Customs services of Ukraine Public Policy Assessment and EU Policy Framework Within the context of the European Neighbourhood Policy (ENP), both Moldova and Ukraine have committed to progress towards efficient and comprehensive border management, including specific customs and border guard issues. Bilateral relations were upgraded with the signing of Association Agreements (AA), including a Deep and Comprehensive Free Trade Area (DCFTA), and Visa Liberalisation Action Plans (VLAP) between the EU and each partner country. The EU gave a positive opinion on adoption of legislation and its implementation in the framework of the Visa Liberalisation dialogue for both countries, including provisions related to border management, fight against organised crime and data protection. These agreements required a stronger commitment from the partner countries in undertaking the necessary administrative reforms, building capacity, adopting legislation and related implementing measures to comply with EU (and international) standards in the area of the movement of people and goods, while achieving an appropriate balance between effective control and the facilitation of legitimate trade. Chief among the leading principles in the field are the basics of Integrated Border Management (IBM), Schengen Border Code and Community Customs Code (including EU customs blueprints). TIn Ukraine, Road Map on joint operational border management with EU Member States and Moldova was endorsed by the Ukrainian President at the end of 2014, whereas the Cabinet of Ministers approved the second Integrated Border Management (IBM) Concept (2016- [3]

78 2020). This roadmap together with its Action Plan envisages shared border control, joint border patrolling and operational exchange of data and risk analysis. In Moldova, the overall responsibility to implement tasks arising from the Strategy and action plan is vested in the National Council on IBM, which coordinates the activity of the agencies involved in the implementation of the IBM. The IBM strategy and its action plan are also very strongly linked to the Strategic Development Programme of the Border Police for the period of , and to the Reform Concept of the Ministry of Internal Affairs. The Strategy is also part of the Sector Policy Support Programme of the EU, with the main objective of achieving an effective balance between secure borders and the facilitation of legal movements of persons, vehicles and goods, according to EU standards. On November 7 th, 2014 the Government of Moldova approved the National Strategy of Integrated Border Management for , aimed at developing a high level of state border control, border security and counteraction of irregular migration and cross-border crimes. In the IBM strategies of both states, enhancing cooperation with neighbouring countries is considered as a priority. More specifically, constructing/reconstructing BCPs according to the current and foreseen needs, organising jointly operated/shared border crossing points using EU principles, or optimizing the number of control agencies are important objectives followed continuously by both countries. The partner services operate based on the agreement between the countries organising joint control at six international and one local BCP (Criva-Mamaliga, Briceni-Rossoshany, Medveja-Zelionaya, Larga-Kelmentsy, Giurgiulesti Reni (Road), Pervomaysk-Kuchurgan, and Udobnoye-Palanca-Mayaky). The formal agreement is to be renewed. Discussions between the four partners are ongoing and a draft was presented in A Protocol between the Administration of State Border Guard service of Ukraine, State Fiscal Service of Ukraine and Border Police of Republic of Moldova, Customs service under the Ministry of Finance of Republic of Moldova on organisation of the shared control in the international automobile BCP Mayaki-Udobnoe-Palanka and Technological Schemes (TS) on BCP Palanka was developed by the working group on shared BCP facilitated by the EUBAM. In November 2015, the final text of the Agreement between the Government of Moldova and the Cabinet of Ministers of Ukraine on organisation of information exchange on persons and transport crossing the Ukraine-Moldovan border was approved. A Protocol between the Border Police Department of the Ministry of Internal Affairs of Republic of Moldova and Administration of State Border Guard Service of Ukraine on contact points at the Moldovan-Ukrainian state border is also being prepared. It is agreed to locate contact points at Palanca BCP (Moldova), to become the only Contact Point covering the entire common border. A protocol on the shared control between the Border Police of the Ministry of Internal Affairs of the Republic of Moldova, Customs Service of the Ministry of Finance of the Republic of Moldova, Administration of the State Border Guard Service of Ukraine and State Fiscal Service of Ukraine at the BCP Pervomaisk-Kuchurhan on the territory of Ukraine was signed in November Stakeholder analysis The key stakeholders of the project are the Customs Service under the Ministry of Finance of the Republic of Moldova (Moldova CS), the State Fiscal Service of Ukraine (Ukraine SFS), [4]

79 the Border Police under the Ministry of Internal Affairs of the Republic of Moldova (Moldova BP), the State Border Guard Service of Ukraine (Ukraine SBGS). Border Police of the Republic of Moldova Border Police of the Republic of Moldova is the autonomous national authority subordinated to the Ministry of Interior of the Republic of Moldova. The Border Police is created on basis of reorganisation of the Border Guards Service of Moldova that were demilitarized into a competent law-enforcement body and fully integrated into the Ministry of Internal Affairs. The state border control is carried out by the Border Police through its central structures, the Border Police Department, four regional directorates and Chisinau International Airport. The Border Police structure includes four Regional Directorates (North, West, South and East) and 41 Border Police Sectors at local level. The (41) Border Police Sectors carry out their legal competences along the land and water border with its 81 BCPs. 25 BCPs are located along the central sector of the Moldovan-Ukrainian border. In June 2015, a cooperation agreement was signed between Border Police and Customs Service, regulating among others, the implementation of joint mobile patrols between border police and customs. Customs Service of the Republic of Moldova Moldova CS is directly subordinated to the Ministry of Finance. Its organisational structure consists of the Headquarters, which includes the management, represented by Director General, 2 departments, formed by divisions and sections and separate divisions. Each division includes sections and/or sectors. On the territorial level there are 7 customs houses and 106 customs posts (internal and border ones). The National Action Plan for implementation of the Association Agreement within the period , was adopted by the Government of Moldova in State Border Guard Service of Ukraine The organisational structure of the Ukraine SBGS has four levels: Central Administration in Kiev, Regional Directorates (5), Border Guard Detachments (26 geographical and 10 mobile) under command of the Regional Directorates, and Border Guard (BG) Units (Border Crossing Points - BCPs, Border Surveillance Posts and Marine Guards). The State Border Guard Service of Ukraine is part of the Ministry of Internal Affairs. Currently the Central Administration of Ukraine SBGS has elaborated a draft internal regulation of the administration and coordination of Ukraine SBGS by the Minister of Internal Affairs of Ukraine. The SBGS prepared a Concept of Development of the State Border Guard Service of Ukraine for the period to The plan on indicators breaks down achievements between mid (2017) and long term (2020). The countries security services are preparing a common Law Enforcement Development Strategy which will underline the law enforcement character of the SBGS and support the endeavour to continue implementation of the transformation. Joint Border Patrolling operates with the necessary regulative background, involving representatives of the Border Police of the Republic Moldova and the State Border Guard Service of Ukraine. State Fiscal Service of Ukraine On May 21 st, 2014 the Cabinet of Ministers of Ukraine approved the Regulation on the State Fiscal Service of Ukraine. The restructuration is still ongoing, involving the adoption of various legislative acts for defining objectives, tasks, functions and structure at central and [5]

80 regional level, powers of the new body, as well as for introducing relevant amendments in customs and related legislation to reflect restructuration. The service consists of 27 administration departments (of which 4 are directly devoted to customs matters), and 27 regional customs departments. [6]

81 1.1.3 Priority areas for support/problem analysis Within the framework of the project it is foreseen to assist four primary partner services in Ukraine and Moldova (State Border Guard Service of Ukraine, State Fiscal Service of Ukraine, Border Police Agency of Moldova and Custom Service of Moldova). Currently all four agencies are involved in enhancing IBM practices along the border, but the lack of proper financing, modern tools and resources impedes the efficient management of flow of persons and goods across the border. Whereas joint control or joint patrolling are in place, further improvement of these practices is needed. Enhancing communication and exchange of information remains key priority in accordance to bilateral and international commitments of both countries. The project proposes to provide assistance to develop and enhance Integrated Border Management along the Ukraine-Moldova border, notably by improving transparency, operational capacity and capability of Ukraine and Moldovan Border and Custom Agencies. The project purpose is to facilitate the cross-border cooperation between the border authorities through implementing best practices of the European Union such as shared border crossing points (SBCP), common information exchange instrument and setting up Contact Point at the border following the practice of Police and Customs Cooperation Centres (PCCC) - excellent proven records in fostering the cross border cooperation between the EU member states. It is suggested to focuse on four key areas of intervention: (i) establish sustainable joint border control operation at Kuchurhan-Pervomaisk Border Crossing Point, on the territory of Ukraine, (ii) to establish Reni Shared Border Crossing Point on the territory of Ukraine, to replace joint border control at Reni-Giurgiulesti Border Crossing Point, (iii) enhance the border control related cooperation among the stakeholders by establishment of a bilateral Contact Point at Palanca Shared Border Crossing Point, on the territory of Moldova (iv) establishment of specific automated information exchange system on central level which provide real time data for relevant agencies involved border control operations on Moldovan Ukrainian border. The merger of Reni-Giurgiulesti BCP into the new Reni SBCP would be a subsequent step in the direction of proliferation of such best EU practice, following the examples of Rossoshany- Briceni BCP and Palanca SBCP. The current facilities on Reni side at Reni-Giurgulesti BCP are adequate to accommodate all four stakeholders under one roof without having negative impact on the quality of border control. As a flanking measure relevant equipment procurement is thought to improve the performance of authorities involved in border control. The planned reconstruction of part of the road on the Moldovan side of the border as well as between Reni and Giurgiulesti will further facilitate easy access to the strategic BCP. The Kuchurhan-Pervomaisk Border Crossing Point for evident political reasons cannot still be called Shared BCP. The recently signed bilateral agreement between the two countries on the automated information exchange system is expected to boost the volume of the exchanged data on cross border traffic and improve the number of detected violations even within a short period of time. Throughout the project implementation special attention will be devoted ensuring adoption and application of EU standards in the operational capacities of the relevant Ukraine and Moldova authorities by complementary projects such as EUBAM. [7]

82 2 RISKS AND ASSUMPTIONS Risks Level Mitigating measures Lack of commitment and weaknesses in decision making to implement targeted IBM strategy and reforms of BM and Custom Authorities by Governments. Medium Intensified policy dialogue with the Governments. Advocacy and awareness raising on the benefits of the IBM and related reforms within the relevant authorities. Lack of institutional commitment Low Cooperation agreement was signed prior to the project implementation, but still operational elements should be addressed. Beneficiaries may be at different stages of reform and reform commitment. Also, there might be uneven political commitment among key stakeholders. 20 % co-financing cost requirement from beneficiary countries under reform limited budget resources, difficult economic - political situation Limited capacity at multiple stakeholder agencies can delay the implementation The operations in Kuchurhan BCP are not accepted by Transnistria. Medium Medium Medium High The EU delegation and complementary assistance projects (EUBAM, twinnings) will make sure that reform commitment continues to be strong and that all the key stakeholders are clear on the reform objectives and their relevant roles. EU to follow on the commitment of the beneficiaries (letters of commitment sent by beneficiaries) To mitigate the risk of delays, the EU, the EUBAM and complementary projects will design a monitoring and evaluation framework with a consistent feedback mechanism to support timely implementation of reforms. Steering committee on the projects could also be set up for the purpose by the implementer. The project has to counter possible negative impact with supporting public information campaigns. Gradual approach of implementing the project concerning the joint control at Kuchurgan BCP is advised, notably with deployment of customs authorities first and border police at a later stage. [8]

83 Assumptions Ukrainian and Moldovan authorities will remain committed to the reform of their border and customs services; Implementation of the IBM concept, curbing corruption, countering cross-border crime, enhancing interagency and international co-operation will remain priority for both countries; the four agencies will be willing to closely cooperate in order to accelerate control of persons, goods and vehicles across borders in order to facilitate trade; National legislation/ legal regime in the country allows the introduction of advance IBM practices. The political dynamics around Transnistria-related issues do not impact on the implementation of this initiative [9]

84 3 LESSONS LEARNT, COMPLEMENTARITY AND CROSS-CUTTING ISSUES 3.1 Lessons learnt Many lessons can be taken from similar completed EU support to Integrated Border Management (EUBAM, Eastern Partnership IBM Flagship projects, national projects, national budget support in the area of border management): The application of the various aspects IBM remains limited and inconsistent, whether operationally or in terms of information exchange. In general, all forms of co-operation are still seen as a testing/pilot modes rather than institutionalised practices. Harmonisation of IBM action plans, notably international/cross-border co-operation elements need to be further improved. Targeting assistance to different law enforcement agencies in the country proved a good tool in facilitating trade and curbing border security risks (smuggling, trafficking in human beings, controlling food safety and countering public health threats, etc.). A more inclusive approach by partner services in line with IBM principles needed to be promoted, notably in the fight against organised crime. The regional delivery of assistance has allowed for economies of scale and synergies and generally, in comparison with national projects, has significantly improved international co-operation and communication, stimulating much needed and useful exchange of practices and experience on a peer-to-peer basis. The implementation of the Eastern Partnership (EaP) funded project on joint border patrolling of the green and blue border between Moldova and Ukraine showed to be effective and efficient contributing to the further improvement of border management and bilateral ties between the two countries; 3.2 Complementarity, synergy and donor coordination The EU started developing a long-term policy in the field of justice, freedom and security with both countries since at least The most relevant institutional actors in the area of border management presently are: the European Agency for the Management of Operational Cooperation at the External Borders of the Member States of the European Union (Frontex), EUBAM, which since 2005 supports improvements to the IBM standards of border management in Moldova and Ukraine; European Union Advisory Mission to Ukraine (EUAM) main objective is to support the Government of Ukraine in the preparation and implementation of comprehensive civil sector security sector reform, including aspects of border management and customs affairs, good governance and anticorruption; Group of High Level Advisers to the Government of Moldova In that context, EU has disbursed a line of project interventions and financial support, chief among which: the EaP IBM Flagship Initiative Training Project, a capacity-building project (dialogue support, training, strategy/action plan support) in (integrated) border management, implemented by the International Centre for Migration Policy Development (ICMPD) until June 2013; [10]

85 the EaP- IBM Flagship Initiative Pilot projects, in general providing equipment and/or infrastructure, complemented with a capacity building component, and focused on a specific border (segment); As complementary measures within the framework of IBM twinning project for the SFS / Custom Service in Ukraine was launched on 10 January 2016 for the amount of EUR 1.8 million while another twinning tender for the State Border Guards Service for EUR 1.3 million was successfully completed. Both twinning is implemented by EU Member States (Germany Poland and Lithuania) in attempt to further support the implementation of IBM elements in Ukraine and bringing state services to EU standards and norms. As part of the 2013 Annual Action Programme in favour of Moldova and in line with the priorities of the EU - Moldova political dialogue, EU allocated EUR 21 million through the Sector Policy Support Programme for the implementation of the EU Moldova Visa Liberalisation Action Plan (VLAP). The overall objective of this programme is to contribute to the improvement of the mobility of Moldovan nationals, while ensuring public order and security, consolidating the rule of law and strengthening human rights protection in line with European standards and best comparative practices. EU has funded the implementation of the "Fixed and mobile network communications system for Moldovan Border Police", for a total amount of approximately EUR 22 million. Ukraine's and Moldova's state services benefit from large array of events within the TAIEX instrument. All these interventions are coordinated centrally by the Delegations of the EU to Ukraine and to Moldova. Besides the EU, the international actors involved in border-related assistance in Moldova and Ukraine include the Organisation for Security and Co-operation in Europe (OSCE) and the United States (including a programme to support customs and border guards in Moldova and Ukraine), as well as IOM and the United Nations System Agencies (United Nations High Commissioner for Refugees - UNHCR and UNDP). The EU and the United States are the biggest donors in the border management sphere in both countries. Close cooperation and coordination of activities are ongoing on a permanent basis in order to ensure synergy effects. Moldova and Ukraine were among the countries involved in the Söderköping process, aimed at facilitating cross-border co-operation between EU Member States and the Western Newly Independent States (NIS) on asylum, migration and border management issues. Although the EU support to the Söderköping process has come to an end, the Secretariat of the Eastern Partnership Panel on Migration and Asylum managed by IOM continues acting as a resource centre for all countries and international organisations participating in the process. Donor coordination is ensured through recently established various formats. In Ukraine, the EUAM has set up a BMAG Border Management Assistance Group meeting - where key actors and donors are discussing the progress of reform, provide updates and ensure synergies by presenting their activities. The SFS of Ukraine in close coordination and cooperation with [11]

86 EUAM also recently initiated a CMAG Custom Management Assistance Group meeting - with the similar aims and objectives as the BMAG. 3.3 Cross-cutting issues The cross-cutting issues will be addressed throughout the project Civil Society Development and Dialogue The action does not specifically target development and dialogue with the civil society, but the inclusive processes of reform in the border agencies are ensured by other complementary actions (EUBAM, twinings, etc) Environmental Considerations The construction efforts will apply standing environmental regulations. The European Community has a longstanding commitment to address environmental concerns in its assistance programmes. The project is expected to reduce waiting time of trucks, busses and private cars, which will have a positive impact on the nature adjacent to BCPs (reduced levels of car exhaust fumes and litter) The support to the institutions will include a specific component to assist the beneficiary to implement an internal environment assessment to identify areas where it could improve its internal performance vis-à-vis environmental aspects. Increased capacities of customs/border officers at the SBCP will expectedly decrease waiting times at border, which can ultimately result in reduction of air pollution of vehicles. Improvement of border control and management would also have positive impacts on the fight against environment related illegal trafficking (for example wildlife trafficking and illegal movements of waste and chemicals, including pesticides) Equal Opportunities and non-discrimination The relevant Ukrainian and Moldovan Authorities are committed to an equal gender treatment of female travellers and throughout its human resource management. The project will establish a suitable foundation for mainstream gender equality in the future, training both service women and men. The beneficiaries are supporting the combating of discrimination based on gender, race, ethnic origin, religion, faith, health condition, age or sexual orientation. Equal opportunities and non-discrimination in Ukraine and in Moldova is increasingly recognised not only as ethical imperatives but also as factors with far-reaching economic and policy implications. Therefore economic and employment growth, civic engagement and lifelong learning is fostered by providing access and opportunities for all. The project will make its utmost effort integrating the principles of gender equality, nondiscrimination and accessibility for disabled persons into the design of the refurbishment of the BCPs. The project implementer will consult public institutions and stakeholders on whether these principles are sufficiently addressed in relevant project documents, implementation and monitoring Minority and Vulnerable Groups [12]

87 Counter trafficking measures increase security of women, children and vulnerable groups. Shared work places reduce the possibility of profiling (social, ethnic, etc) of individuals and groups. Throughout the construction efforts, special attention will be given to accessibility of the buildings for person with physical disabilities (including construction of toilets for special needed persons). Project aims at more integrated management of the border and with this will increase reaction capacities facing irregular migration, persons without identifications and victims of crime Good Governance The project is expected to be based on good governance principles ("ownership" and "fighting corruption" in particular). Through the organisation of numerous coordination meetings between beneficiaries, it will promote the dialogue between different levels of the two state administrations involved. Moreover, it will help strengthen the partner countries' capacities to better deal with the management of international borders in line with European best practice. Moreover the programme has a strong good governance dimension as proper border management and custom controls allow a better protection of victims of trafficking, and proper compliance with human rights standards, notably when dealing with vulnerable groups. The project will promote and advocate professionalization of the border management in line with best EU practices, thus building of increasingly service-oriented administration based on professional and ethical standards and norms and respect of human rights. By promoting inter-agency and cross border cooperation, the project will increase of level of accountability and supervision among services, thus decreasing corruption and other negative practises. The expected long-term impact is to contribute to the strengthening of good neighbourly relations as well as the facilitation of trade and migration flows. 4 DESCRIPTION OF THE ACTION 4.1 Objectives/results This programme is relevant for the Agenda It contributes primarily to the progressive achievement of sustainable development goals (SDG) targets 16.2, 16.4, 16.5, 16.6, 16.a, but also promotes progress towards Goal 9. This does not imply a commitment by the countries benefiting from this programme. The general objective is to, improve the transparency, operational capacity and capability Ukraine and Moldova Border Management and Custom Agencies and contribute to the progressive achievement of SDG targets set in the Agenda [13]

88 Specific objective #1 (Kuchurhan): Make operational the agreement on joint border control in Kuchurhan-Pervomaisk Border Crossing Point Specific objective #2 (Reni): Specific objective #3 (Palanca): Specific objective #4: (Automated Info Exchange -AIE) Upgrade the Border Crossing Point Reni-Giurgiulesti to allow joint control on a shared Border Crossing Point on the Ukrainian side Establish a bilateral Contact Point at the Palanca Border Crossing Point. Make operational the agreement on data exchange on people and transport crossing the border between Moldova and Ukraine. Expected results: Result for SO1 (Kuchurhan) Result for SO2 (Reni) Result for SO3 (Palanca) Result for SO4 (AIE) Equipment for supporting joint control at Kuchurhan- Pervomaisk border crossing point identified, procured, tested and in use. Trainings completed. Equipment necessary for the upgrade of the border crossing point Reni-Giurgiulesti, on the Ukrainian side is identified, procured, tested and in use. Trainings completed. Refurbishment works of the buildings as well as repair of the road connecting the two borders are completed. Furniture and equipment for the proper functioning of bilateral contact point identified and delivered Equipment for making operational of automated information exchange between Moldova and Ukraine is identified, procured, tested and in use. 4.2 Main activities Special objective 1(Kuchurhan): Assessment of the situation, procurement of equipment in line with the list prepared by the experts and agreed with the beneficiaries. Trainings and support to establishment of joint border control. Special objective 2 (Reni): Assessment of the situation, procurement of equipment in line with the list prepared by the experts and agreed with the beneficiaries. Road construction and refurbishment works in line with the agreed plan. Trainings to be provided as well as support to establishment of joint border control. Special objective 3 (Palanca): [14]

89 Assessment of the situation, procurement of equipment in line with the list prepared by the experts and agreed with the beneficiaries. Trainings to be provided. Special objective 4 (Automated Info Exchange): Assessment of the situation, procurement of equipment in line with the list prepared by the experts and agreed with the beneficiaries. Trainings to be provided. 4.3 Intervention logic Recent developments (AA/DCFTA signatures, Visa Liberalisation for Moldova, advanced process of Visa Liberalisation in Ukraine) require maturity of border management and customs reform and implementation of all related norms, standards and practices in pursuit of EU level of excellence. Since 2014 the EU-Ukraine Association Agreement, the Government of Ukraine has taken a commitment, in the first place in front of its people, to pursue economic, judicial, and financial reforms to converge its policies and legislation to those of the European Union. The whole spectrum of the activities should boost the effect of introduced DCFTA and VLAP standards. Facilitating mobility and trade will alleviate burden from trading businesses (simplified procedures, increased e-services, waiting times at border) and provide to travellers client-friendly service, based on ethical and professional norms (treatment of passengers and vulnerable groups, reference mechanisms of irregular migrants and refugees, etc.). This will ultimately positively contribute to the economic development of the region and well-being of population. Promoting and proliferating intra-, inter-agency and cross border cooperation (single window, joint controls, joint operations, jointly operated border crossing points, sharing of resources), as well as technologically advanced e-tools (smart border, e-customs, etc.) would logically result in reduced need of human and financial resources (financial sustainability). Close cooperation and coordination, including trust building measures (exchange of information, joint situation/risk analysis of the border, etc.), would contribute to the more effective and efficient fight against all types of organised crime and corruption in border services. Coordination between agencies also would guarantee a comprehensive multidimensional approach to border management which affect various aspects of security, trade, public health and well-being. In line with the above principles the main purpose of the project is to reduce the time of crossing the border by supporting the border control technology with equipment and facility developments, promoting the principles of Integrated Border Management concept, transparency, cooperation and information exchange. Works and supplies do not self-implement in relation to overarching operational modalities and strategies. It is therefore foreseen that EUBAM will incorporate necessary assistance under their 2017 programme (possibly 2018) in order to ensure actual implementation of the results outlined in section 4.1 above. This will be done through devising, supporting implementation of, and evaluating pilot projects as described in Section 3.2 above. [15]

90 The introduction of joint control at Kuchurgan BCP requires much more careful approach due to the political sensitivities surrounding the region of Transnistria. For the purpose of mitigating any negative reaction from the side of Transnistrian authorities, it is proposed that the introduction of joint control is conducted in two phases deployment of Moldovan Customs officers in short term, and deployment of Moldovan Border police in long term. In any case, equipment for both customs and border police of Moldova is foreseen in the action. 5 IMPLEMENTATION 5.1 Financing agreement In order to implement this action, it is not foreseen to conclude a financing agreement with the partner countries. 5.2 Indicative implementation period The indicative operational implementation period of this action, during which the activities described in section 4.2 will be carried out and the corresponding contracts and agreements implemented, is 60 months from the date of adoption by the Commission of this Action Document. Extensions of the implementation period may be agreed by the Commission s authorising officer responsible by amending this decision and the relevant contracts and agreements; such amendments to this decision constitute technical amendments in the sense of point (i) of Article 2(3)(c) of Regulation (EU) No 236/ Implementation modality Indirect management with an international organisation This action may be implemented in indirect management with International Organization for Migration (IOM) in accordance with Article 58(1)(c) of Regulation (EU, Euratom) No 966/2012. This implementation entails the management of the activities foreseen in this Action Document. Implementation by IOM is justified by several reasons: Extensive experience of IOM implementing EU financed contracts, which is actually the core action of this project; IOM Ukraine has extended capacity and expertise that goes beyond their traditional role of being migration specialist. IOM developed much wider expertise that includes border management; The complexity of the assistance package (works, supply, services supervisory of works by technical assistance, trainings), involvement of two countries and several locations (the capitals and three border crossing points), which requires substantial coordination; The urgency of delivery for political reasons as it is the case of Kuchurgan; The political sensitivity due to the frozen conflict in Transnistria and IOM's neutral status; [16]

91 The synergies with the EUBAM ensured by the same implementing partner (IOM); The good reputation and relationships that IOM established with the partner countries; The efficient management of other IOM implemented projects in Ukraine and Moldova; The specialisation of IOM in migration issues which would ensure synergies between border management activities and migration; The strong track record in implementing successful projects in the region (EUBAM, MIGRECO, SIREADA, PRINEX, SURCAP). The entrusted entity would carry out the following budget-implementation tasks: management of the public procurement for supplies, works and services, contracting and payments (liquidation of eligible costs and recovery); financial monitoring, preparation support for audits. If negotiations with the above-mentioned entrusted entity fail, that part of this action may be implemented through indirect management with UNDP. The implementation by this alternative entrusted entity would be justified because of the: UNDP experience in the implementation of the previous phases of EUBAM; UNDP is the current implementer of the construction/supplies project Palanca shared BCP (which will integrate the contact point project under this decision), its approach being a model for the upgrade of the Reni Shared BCP and joint control at Kuchurgan BCP; UNDP's strong regional experience, including on bi-national projects involving Ukraine and Moldova, which have secured an access to appropriate level of authorities in both countries and a neutral status recognised by all stakeholders. 5.4 Scope of geographical eligibility for procurement and grants The geographical eligibility in terms of place of establishment for participating in procurement and grant award procedures and in terms of origin of supplies purchased as established in the basic act and set out in the relevant contractual documents shall apply. The Commission s authorising officer responsible may extend the geographical eligibility in accordance with Article 9(2)(b) of Regulation (EU) No 236/2014 on the basis of urgency or of unavailability of products and services in the markets of the countries concerned, or in other duly substantiated cases where the eligibility rules would make the realization of this action impossible or exceedingly difficult. 5.5 Indicative budget Indirect management with IOM (including communication and visibility costs) EU contribution (amount in EUR) Indicative third party contribution, in currency identified Parallel co-financing by Ukraine and Moldova Totals [17]

92 5.6 Organisational set-up and responsibilities The action will be implemented by IOM and shall entail periodic assessment of progress and delivery of specified project results towards achievement of action's objectives. Regular meetings to review progress and steer the implementation of this initiative will take place in occasion of the EUBAM Advisory Board meetings which take place every semester in Odessa or Chisinau. Further update discussions might take place in the framework of the bi-annual Eastern Partnership IBM panel meetings where the Frontex-implemented capacity building project is also present. Coordination with the UNDP on Palanca implementation will be ensured by the EUBAM who is providing technical advice to both projects. This would ensure synergies between equipment to be provided under the Palanca BCP upgrade project and this initiative. This initiative should not substitute part of the equipment included in the initial Palanca project. EUBAM and the regional IBM capacity building project implemented by Frontex will complement with the trainings necessary for the action. Highly specialised trainings for the operation and maintenance of provided equipment will be delivered by the suppliers themselves. Broader scope trainings on management of change at BCPs introduced by the new equipment will be provided by the EUBAM. 5.7 Performance monitoring and reporting A comprehensive monitoring framework will be developed for the project. Six-monthly progress reports, annual reports, project completion report and special reports, as needed, will be drawn up by the implementing partner. The day-to-day technical and financial monitoring of the implementation of projects will be a continuous process and part of the implementing partner s responsibilities. The implementing partner shall establish a permanent internal, technical and financial monitoring system for the action and elaborate regular progress reports (not less than annual) and final reports. Every report shall provide an accurate account of implementation of the action, difficulties encountered, changes introduced, as well as the degree of achievement of its results (outputs and direct outcomes) as measured by corresponding indicators, using as reference the log frame matrix. The report shall be laid out in such a way as to allow monitoring of the means envisaged and employed and of the budget details for the action. The final report, narrative and financial, will cover the entire period of the action implementation. The Commission may undertake additional project monitoring visits both through its own staff and through independent consultants recruited directly by the Commission for independent monitoring reviews (or recruited by the responsible agent contracted by the Commission for implementing such reviews). Additional reporting requirements or other frequency than stipulated above will be agreed with the EU Delegation, taking into account particular circumstances. The content and distribution of reports to interested partners will be agreed with the EU Delegation. [18]

93 5.8 Evaluation Having regard to the importance of the action, a final evaluation will be carried out for this action or its components via independent consultants contracted by the Commission. It will be carried out for accountability and learning purposes at various levels (including for policy revision), taking into account in particular the fact that such cooperation and coordination in between two countries and four agencies are complex, the results to be achieved is an innovative action and a pilot being tested. The Commission shall inform the implementing partner at least 1 month in advance of the dates foreseen for the evaluation missions. The implementing partner shall collaborate efficiently and effectively with the evaluation experts, and inter alia provide them with all necessary information and documentation, as well as access to the project premises and activities. The evaluation reports shall be shared with the partner countries and other key stakeholders. The implementing partner and the Commission shall analyse the conclusions and recommendations of the evaluations and, where appropriate, in agreement with the partner countries, jointly decide on the follow-up actions to be taken. The provisions of the Framework Administrative Agreement concluded between the European Commission and IOM shall apply where relevant. The financing of the evaluation shall be covered by another measure constituting a financing decision. 5.9 Audit Without prejudice to the obligations applicable to contracts concluded for the implementation of this action, the Commission may, on the basis of a risk assessment, contract independent audits or expenditure verification assignments for one or several contracts or agreements. The provisions of the Framework Administrative Agreement concluded between the European Commission and IOM shall apply where relevant. The financing of the audit shall be covered by another measure constituting a financing decision Communication and visibility Communication and visibility of the EU are a legal obligation for all external actions funded by the EU. Communication and visibility will be given high importance during the implementation of the Action. This action shall contain communication and visibility measures which shall be based on a specific Communication and Visibility Plan of the Action, to be elaborated at the start of implementation and supported with the budget indicated in section 5.3 above. The implementation of the communication activities shall be the responsibility of the organisation, and shall be funded from the amounts allocated to the Action. Appropriate contractual obligations shall be included in the delegation agreements. All necessary measures will be taken to publicise the fact that the action has received funding from the EU in line with the Communication and Visibility Manual for EU External Actions. [19]

94 Additional Visibility Guidelines developed by the Commission (DG NEAR) will have to be followed. Visibility and communication actions shall demonstrate how the intervention contributes to the agreed programme objectives. Actions shall be aimed at strengthening general public awareness and support of interventions financed and the objectives pursued. The actions shall aim at highlighting to the relevant target audiences the added value and impact of the EU's interventions. Visibility actions should also promote transparency and accountability on the use of funds. It is the responsibility of the organisation to keep the EU Delegations fully informed of the planning and implementation of the specific visibility and communication activities. Political communication will be led by the EU Delegation to Moldova in agreement with the EU Delegation to Ukraine, supported by the EUBAM. The organisation shall report on its visibility and communication actions in the report submitted to the ENI monitoring committee and the sectoral monitoring committees. The provisions of the Framework Administrative Agreement concluded between the European Commission and IOM shall apply where relevant. [20]

95 Specific objective 1: Outcome Overall objective: Impact APPENDIX - INDICATIVE LOGFRAME MATRIX (FOR PROJECT MODALITY) 2 The activities, the expected outputs and all the indicators, targets and baselines included in the logframe matrix are indicative and may be updated during the implementation of the action, no amendment being required to the financing decision. When it is not possible to determine the outputs of an action at formulation stage, intermediary outcomes should be presented and the outputs defined during inception of the overall programme and its components. The indicative logframe matrix will evolve during the lifetime of the action: new lines will be added for including the activities as well as new columns for intermediary targets (milestones) for the output and outcome indicators whenever it is relevant for monitoring and reporting purposes. Note also that indicators should be disaggregated by sex whenever relevant. The general objective is to further enhance integrated border management, improve the transparency, operational capacity and capability of Ukrainian and Moldovan Border Management and Customs Agencies and contribute to the progressive achievement of SDG targets set in the Agenda Results chain Indicators Baselines (incl. reference year) Further enhance integrated border management, improve the transparency, operational capacity and capability Ukraine and Moldova Border Management and Custom Agencies and contribute to the progressive achievement of SDG targets set in the Agenda IBM strategy implemented in both countries according to best European standards. Ukraine and Moldova border management and custom agencies operational capacity and capacity enhanced IBM strategy and action plan approved 2016 Targets (incl. reference year) Implementation rate of the plan in Sources and means of verification Interview with key stakeholders (EUAM, EUBAM) on the implementation of IBM strategy Findings of evaluation studies Assumptions The governments are engaged in applying IBM standards in line with the EU acquis. Specific objective #1: Make operational the agreement on joint border control at the Kuchurgan-Pervomaisk Border Crossing Point Result 1. Equipment for supporting joint control at Kuchurhan- Pervomaisk Border Crossing Point identified, procured, tested and in use. Trainings completed. New joint control at BCP is operational. Number of persons and goods crossing the border increased Number of cross-border crimes at BCP decreased Existing BCP facilities, data on travellers and goods, waiting time, number of criminal offences, etc in 2016 Condition of existing buildings, road and equipment of BPC in 2016 State of play in Condition of existing buildings, road and equipment of BPC in Final Acceptance Certificate Findings of EUBAM or other stakeholders' reports No delay on construction, Budget sufficient Readiness and capability of beneficiaries to use provided equipment in efficient and effective manner 2 Mark indicators aligned with the relevant programming document mark with '*' and indicators aligned to the EU Results Framework with '**'. [21]

96 Outputs Specific objective 2: Outcome(s) Outputs Refurbish Kuchurhan-Pervomaisk Border Crossing Point procure, deliver, install and test relevant equipment, Establish Joint border control at Kuchurhan-Pervomaisk Border Crossing Point, on the territory of Ukraine Procure equipment to create good conditions for conducting Joint operational activities by the agencies involved in border control at Kuchurhan-Pervomaisk Border Crossing Point Facility constructed obtains Final Acceptance. Equipment delivered obtain final acceptance Inventory in 2016 Inventory of used equipment and facilities in 2016/17 Final Acceptance Certificate Monitoring report by EUBAM Specific objective #2: Upgrade the Border Crossing Point Reni- Giurgiulesti to allow joint control on a shared Border Crossing Point on the Ukrainian side Result 2. Equipment necessary for the upgrade of the Border Crossing Point Reni-Giurgiulesti, on the Ukrainian side is identified, procured, tested and in use. Trainings completed. Refurbishment works of the buildings as well as repair of the road connecting the two borders are completed. BCP expanded and operational in coordination between 4 beneficiary services Number of persons and goods crossing the border increased. Number of cross-border crime at BCP decreased Existing BCP facilities, data on travellers and goods, waiting time, number of criminal offences, etc in 2016 State of play in 2017/18 Provisional Acceptance Certificate Findings of EUBAM or other stakeholders' reports No delay on construction, Budget sufficient Readiness and capability of beneficiaries to use provided equipment in efficient and effective manner Refurbish / Construct Reni Border Crossing Point; procure, deliver, install and test relevant equipment Establish JBC at the new Reni Shared Operated Border Crossing Point, on the territory of Ukraine Facility constructed obtains Final Acceptance. Equipment delivered obtain final acceptance Inventory in 2016 Inventory of used equipment and facilities in 2016/17 Provisional Acceptance Certificate Monitoring report by EUBAM [22]

97 Outputs Specific objective 4: Outcome(s) Outputs Specific objective 3: Outcome(s) Procure equipment for conducting joint operational activities by the agencies involved in border control at the new Reni Shared Operated Border Crossing Point Specific objective #3: Establish a bilateral Contact Point at the Palanca Border Crossing Point. Result 3 Furniture and equipment for the proper functioning of bilateral Contact Point identified and delivered equipment obtained final acceptance Contact point is operational Number of cross-border crime decreased number of criminal offences in 2016 Number of information items exchanged by partners State of Play in 2017/18 Final Certificate Acceptance Proper utilisation and improved communication among beneficiaries Establish Contact Point at Palanca Border Crossing Point Procure equipment to create good conditions for assume duty and maintain its core task of the Contact Point Officers Deploy officers (select, train etc) from agencies involved in border control at Palanca Border Crossing Point Specific objective #4: Make operational the agreement on data exchange on people and transport crossing the border between Moldova and Ukraine. Result 4. Equipment for making operational automated information exchange between Moldova and Ukraine is identified, procured, tested and in use. Equipment procured, installed and tested Number of CP officer appointed, trained Equipment obtained final acceptance Number of cross-border crime decreased (including irregular migration) number of criminal offences in 2016 Number of information items exchanged by partners Functional state of play of Contact points in 2017/18 State of Play in 2017/18 Provisional Certificate Final Certificate Acceptance Acceptance Proper utilisation and improved communication among beneficiaries Procure equipment to create good conditions to facilitate information exchange among agencies involved in border control Equipment procured, installed and tested, Number of officer trained Number of data on entry/exit Functional state of play of Contact points in 2017/18 Provisional Certificate Acceptance [23]

98 Procure equipment for supporting the establishment of automated information exchange system at the shared border crossing points Enhance risk analysis capabilities of the Moldovan Border police in respect of border crossings registered at BCPs along the Central segment of border Upgrade the border control technology and enhance interagency cooperation by the stakeholders that facilitates the cross border traffic, and further reduces processing/waiting time at borders Provision of trainings border crossing on persons and vehicles between the UASBGS and MDBP registered [24]

99 This action is funded by the European Union ANNEX 5 of the Commission Implementing Decision on the ENI East Regional Action Programme 2016 and 2017, Part I Action Document for Integrating SMEs from the EaP countries into domestic and global value chains 1. Title/basic act/ CRIS number 2. Zone benefiting from the action/location Integrating SMEs from the EaP countries into domestic and global value chains CRIS number: ENI/2016/ financed under European Neighbourhood Instrument The action shall be carried out at the following location: Eastern Partnership countries (Armenia, Azerbaijan, Belarus, Georgia, Republic of Moldova 1 and Ukraine) 3. Programming document 4. Sector of concentration 5. Amounts concerned 6. Aid modality(ies) and implementation modality(ies) Programming of the European Neighbourhood Instrument (ENI) Regional East Strategy Paper ( ) and Multiannual Indicative Programme ( ) Trade Related Technical Assistance - Aid for Trade Total estimated cost: EUR Total amount of EU budget contribution EUR Project Modality Indirect management with the International Trade Centre (ITC) 7. DAC code(s) 250 business and other services Business support services and institutions 331 Trade policy regulations and trade-related adjustments 8. Markers (from CRIS DAC form) General policy objective Participation development/good governance Not Significant Main targeted objective objective x 1 Hereinafter referred to as Moldova. [1]

100 9. Global Public Goods and Challenges (GPGC) thematic flagships Aid to environment x Gender equality (including Women x In Development) Trade Development x Reproductive, Maternal, New born x and child health RIO Convention markers Not targeted Significant objective Main objective Biological diversity x Combat desertification x Climate change mitigation x Climate change adaptation x 4. Human development SUMMARY The project will help small and medium sized enterprises (SMEs) from Eastern Partnership (EaP) countries integrate into domestic and global value chains and access new markets with a focus on the European Union. This will be done by (a) assisting SMEs to produce value added goods in accordance with international and EU market requirements; (b) improving sector specific services for SMEs along the selected value chains; and (c) linking SMEs to domestic and global value chains and markets in particular within the EU. Although the agribusiness sector has been preliminary identified as a sector of priority for the region, the specific sectors of intervention for each country will be identified and validated during the inception phases of the project. As a first step, a detailed roadmap (strategy) will be developed for each country based on thorough value chain analyses of the target product groups to identify major competitiveness constraints and market opportunities. Specific technical assistance solutions will then be developed based on the sector s needs in each country as well as the requirements of target markets to boost SME competitiveness and increase value added in selected value chains. This will involve comprehensive consultations with sectoral stakeholders from the private and public sectors. Based on the value chains roadmaps, the project will enhance SME capacities and competencies in areas affecting SME competitiveness, including supply chain management, quality management and packaging, marketing and sales, financing options, trade promotion and trade fair participation. Once improvements are made, the pilot SMEs will be linked to target markets and value chains, domestically and abroad, with particular focus on the EU, in order to ensure that enhanced competitiveness results in increased sales, value chain integration, and diversification. The experience of the pilot group will be shared with a wider group of beneficiaries and best practices will be replicated. The project will also help SMEs access finance by connecting them to existing financing mechanisms, for example the facilities of the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD). Steps may be also taken to [2]

101 stimulate productivity enhancements by facilitating European technology transfer to EaP countries. Furthermore, the project will support existing sectoral business support organisations (BSOs) 2 or assist in establishing new ones, if needed, which will act as vehicles to improving SME capacities through the provision of quality and relevant business services. They will receive advisory services, training and coaching in sector-specific market intelligence and provision of various sectoral business development services to SMEs, in particular quality management and certification services according to European requirements. 1. Context 1.1 Sector/Country/Regional context/thematic area In the past years the Eastern Partnership countries have achieved significant progress in reforming their economies and integrating into global market place. Closer cooperation with the EU has led to the signing of Association Agreements (AA) including Deep and Comprehensive Free Trade Areas (DCFTAs) with three EaP countries: Georgia, Moldova and Ukraine. The European Union is a key trading partner for most of the EaP countries, accounting for around half of Moldova s imports, more than 30% of goods imported into Azerbaijan and Ukraine, and around 25% of the goods imported into the Georgia, Belarus and Armenia. Similarly, the EU accounted for roughly 50% of all exports from Azerbaijan and Moldova, more than 30% of Armenia s exports, over 25% of exports from Belarus and Ukraine, and 20% of exports from Georgia. To fully benefit from the opportunities offered by closer economic cooperation with the EU, the EaP countries need to further modernise their regulatory and business environment and ensure that it is harmonised with that of the EU. Businesses simultaneously need to learn to produce goods according to EU standards and requirements. As such, efforts need to be made to enhance SME capacities to design, produce, and promote products that conform to the expectations of the new markets. The three countries that signed an Association Agreement (Georgia, Moldova and Ukraine) face a particular challenge: as their legislatures harmonise their respective food safety laws and technical regulations to those of the EU, SMEs will be required to adapt to the new regulations in order to remain competitive at both domestic and international markets. Should they fail to do this, the lack of compliance could be damaging for local producers as they may lose traditional market share to importers. Enhancing SME capacities to connect to new value chains is especially pertinent today given recent geopolitical events in the region. SMEs face challenges resulting from the deteriorated business environment and disruption of market linkages, as many SMEs have been cut off from traditional markets and value chains. Although the agribusiness sector has been preliminary identified as a sector of priority for the region, the specific sectors of intervention for each country will need to be identified and validated during the inception phases of the project. 2 BSOs include: sector business and trade associations, sector departments within the Chambers of Commerce and Industry and other trade support institutions, quality management institutions (including laboratories), sector-specific consulting companies as well as other formal and informal establishments supporting the sector. [3]

102 The proposed project will therefore address SME competitiveness constraints providing support to SMEs and BSOs. The project will also help SMEs access global and domestic value chains and markets. Although fostering trade cooperation and value-chain integration between EaP countries and the EU will be the project s ultimate objective, opportunities for increasing intra-regional trade between the six beneficiary countries will be investigated as well. To this end, the project may look for ways to increase value addition through intraregional value chain integration. If needed, potential support can also be provided on ad hoc basis in the context of countries World Trade Organisation (WTO) accession process and in terms of compliance with specific WTO requirements (for Belarus and Azerbaijan) Public Policy Assessment and EU Policy Framework The project seeks to directly address the EU priority of greater economic integration with its eastern neighbours. Launched in 2004, the European Neighbourhood Policy (ENP) was designed to help the EU support and foster stability, security and prosperity in the countries closest to its borders. At the last review of its ENP in 2015, the EU introduced its renewed approach to its neighbouring countries, with differentiation and greater mutual ownership being the key elements of the new ENP. The ENP will take stabilisation as its main political priority in this mandate. Economic and social development will be at the heart of the EU's contribution to stabilising the neighbourhood and building partnerships. In 2009, the EU and its six Eastern partners (Armenia, Azerbaijan, Belarus, Georgia, Moldova, and Ukraine) launched the Eastern Partnership, based on a commitment to fundamental values a market economy, sustainable development and good governance. Since then, the EaP has developed into a vibrant forum for exchange and cooperation on issues ranging from trade to energy, transport and education or environment. The 2015 EaP Summit in Riga listed the strengthening of institutions and good governance, mobility and people-topeople contacts, market opportunities and interconnections as shared priorities which will be taken forward with partners. The signing of agreements on a Deep and Comprehensive Free Trade Area, as part of Association Agreements with three EaP countries, Ukraine, Georgia, and Moldova, will allow close economic integration with the EU. As set out at the Eastern Partnership summits in Vilnius in 2013 and Riga in 2015, the implementation of AA/DCFTAs, accompanied by reforms, will result in the partners' comprehensive approximation with international standards and EU legislation and standards. This will lead to the gradual economic integration of partners in the EU internal market and therefore to the creation of an economic area. However, for other partners who do not currently wish to pursue such a model, other alternatives will be sought to promote integration and strengthening trade and investment relations. Having recognised the role that SMEs can play in furthering growth in the EaP countries, the EU launched the SME Flagship Initiative in This wide-ranging initiative supports SMEs in EaP countries to address common challenges, access finance, and enter new markets. Today, the initiative sponsors over EUR 100 million of active projects. Those countries that signed AAs have access to an extended program through the DCFTA Facility for SMEs. [4]

103 The project will also support the goal of economic integration and trade between the EaP and EU by helping SMEs meet EU market requirements, connecting EaP SMEs to EU buyers and investors, facilitating technology transfer, building networks between EaP and EU trade and investment support institutions, and promoting investment between the two regions. The project will therefore also respond to the EURONEST Parliamentary Assembly key recommendations to enhance intra-regional cooperation and integration 3. This project would also be in line with the EC Communication "Trade for All" 4 which calls for more responsible, effective, more transparent to continue delivering economic opportunities. The project shall support partner countries' economic priorities (as evidenced in the roll out of the ENP review- economic development) and existing strategies (i.e. SME development, regional development, agriculture, rural development or other relevant sectoral strategies depending on the results of the inception period and value chains selected) Stakeholder analysis The project will work with a wide array of stakeholders from both the public and private sectors in order to ensure a holistic approach to value chain and trade development. Direct beneficiaries will include SMEs and sectoral BSOs and other sector representative bodies. The sector as well as the beneficiary SMEs will be chosen during the initial phases of the project according to a variety of criteria such as market and export readiness, level of costsharing, and commitment to investing time and resources in implementing project recommendations. The project may also apply other criteria, such as women ownership and the number of women employed to ensure that women are benefiting from the project. In addition to providing direct assistance and coaching to the pilot group of SMEs, the project will also include a broader group of enterprises in its seminars and workshops. This will ensure a wider dissemination of information and knowledge, thereby contributing to the project s sustainability. The selection of enterprises will be done in cooperation with the projects partner BSOs. The ultimate beneficiaries of the project s interventions will be the general populations in EaP countries. By improving competitiveness and connecting SMEs to target markets and valuechains, the project will lead to increased trade and improved investment opportunities in EaP countries. In addition, the project will result in numerous spill-over effects such as increased job creation and earning opportunities, improved health and safety for local consumers (as local quality management processes and infrastructure are harmonized with those of the EU), improved public-private dialogue, greater coordination between governmental institutions, institutional networking and knowledge transfer Priority areas for support/problem analysis 3 Euronest Draft report on EU multiannual financial perspectives and their impact on economic cooperation among Eastern Partnership countries, , _session_2016/draft%20reports/econ_draft_report_2016_en.pdf. 4 [5]

104 While SMEs challenges in specific sectors may differ from country to country, SMEs in all six countries also share the following common constraints that hinder their competitiveness and prevent them from accessing global and EU markets and value chains. Limited awareness of SMEs and BSOs on the global market requirements, in particular EU In order to successfully produce and sell goods in accordance with market demand, SMEs must rely on accurate and up-to-date trade information which allows them to design products according to consumer preferences, ensure that standards and requirements are met and devise effective sales and marketing strategies. Most SMEs in the beneficiary countries have limited access to such information as well as a limited understanding of international and European market requirements. In addition, SMEs in DCFTAs countries often fail to understand the scale and scope of changes resulting from AA/DCFTA compliance and new market access conditions, and how they will be practically affected by the agreements 5. On the other hand, there are only few BSOs with knowledge of AA/DCFTA in any of the three countries and therefore BSOs themselves need support in this area, in particular, in provision of targeted and sector specific data. Limited capacity of SMEs to meet market requirements, in particular those of the EU (including DCFTA requirements for Ukraine, Georgia, and Moldova) Although some larger enterprises have succeeded in interpreting and conforming to international and European quality requirements, SMEs have thus far found it difficult to meet the voluntary and mandatory conditions for selling their goods in the EU and/or to become providers of international investors active in their respective countries (in particular sanitary and phyto-sanitary - SPS - and technical barrier to trade - TBT - measures). For many SMEs the challenge is to shift from meeting CIS requirements to meeting those of Europe. Particularly, SMEs in the DCFTA countries lack technical capacity and resources to comply with AA/DCFTA requirements and find it difficult to justify the relatively high compliance cost. To address this challenge, SMEs do not only need reliable information and knowledge of the change required, but also strategy for implementation and compliance, internal management and process changes, investment in equipment and external certification 6. As a consequence, many smaller companies have difficulties to conclude agreements with international players, refrain from exporting to the EU, or choose to enter the market with lower-value-added products. Small contribution of SMEs to domestic value chains Many SMEs from EaP countries are absent from domestic value chains. This is to a large extent due to the inability of smaller producers to consolidate production, which is further complicated by limited BSO support (also see below). The existing sectoral BSOs lack capacity to help local producers meet the many requirements of established domestic buyers (with regards to consistency of supply, quality, delivery credit, consolidation, packaging, 5 EU Support to the Private Sector in the context of Association Agreements including DCFTAs (Georgia, Moldova and Ukraine), final report of EU-funded project " EU Support to the private sector in the context of Association Agreements/DCFTAs", DAI Europe, 2014, 6 Ibidem. [6]

105 etc.). This is further complicated by weak distribution networks and poor support infrastructure (including lack of cooling and processing facilities, and poor transport infrastructure). Integration with domestic value chains would offer numerous advantages, as it would allow local SMEs to capture the opportunities of the domestic market, and serve as a stepping stone to international markets. Limited availability of quality sector-specific services to SMEs There are only a very few sectoral BSOs in EaP countries that are capable to provide adequate services to SMEs. Most of the existing sectoral BSOs lack capacities to assist SMEs in trade and business development activities, whether in performing market research and designing marketing strategies, providing quality management and certification services, identifying buyers and/or investors (both domestic and international), or organising participation in trade fairs and follow up. This is further complicated by a lack of networks between BSOs and their foreign counterparts, weak sustainability of many BSOs and absence of experience to deal with the more complex demands of companies looking to export to more developed markets. In Georgia, Moldova and Ukraine, there are few BSOs with knowledge of AA/DCFTA; they offer only limited services to SMEs to improve their understanding of the new market access conditions and to help them comply with DCFTA requirements. Poor quality control and certification system Most EaP countries have quality control systems that are suited for exporting to neighbouring countries from the CIS region. These systems are not in full compliance with international requirements, and only a small number of laboratories can meet the surveillance, certification, and inspection requirements of the EU, with only a few of them being internationally accredited. Although different inspection agencies are responsible for various parts of production processes, overlaps and excessive requirements often lead to unnecessary repetitiveness with regards to inspections and laboratory analyses. Even though the beneficiary countries have updated their general food safety and agricultural health laws to comply with WTO requirements, the proper implementation and enforcement of these laws is still lacking. Lack of skills to connect to new buyers in target markets and investors SMEs in the EaP countries often lack the ability to locate, analyse, and pursue commercial opportunities in the local and foreign markets. While limited analysis, strategy, marketing and sales capacities within SMEs are key constraints to access value chains and markets, the inadequate sector-specific business support services represent an additional hindrance (see above about limited availability of quality sector-specific services). Access to finance and capital constraints SMEs in the EaP countries are facing challenges accessing finance, which has become even more difficult in light of depreciating currencies and increasing interest rates associated with the recent economic crisis. These challenges are further complicated by limited financial literacy among small business owners in the EaP region, a factor which makes it difficult for them to apply for and manage traditional loans and credit lines. In addition, the region s small business owners tend to have little knowledge of potential sources of finance, whether through traditional private sector channels or development facilities, and they do not know how to identify and approach appropriate lenders. [7]

106 2 RISKS AND ASSUMPTIONS The conditions in the field pose a number of risks that could affect the full realization of project objectives. For this reason, the project will be flexible in its implementation, adjusting activities according to the changing realities on the ground. It will also try to ensure that risks are managed to the maximum extent possible. Risks Wavering government commitment / changes in beneficiary government priorities Expanding conflict zone in Ukraine Global economic / financial crisis Limited interest, trust, and/or stakeholder buy-in BSOs are not open to collaborating with the project, and are not willing to implement project recommendations SMEs are not open to changing existing practices; are not committed to implementing project Risk level (H/M/L) L M M L L L Mitigating measures The project will anchor as much responsibility with the private sector as possible, including private-sector business support organisations. This will serve to mute any negative changes in the policy environment. Even so, project management will follow up on any potentially relevant changes in the political environment, evaluate the consequences of likely scenarios, and make the necessary adjustments to the project activities. Should conflict spread and impact one of the beneficiary regions in Ukraine, project management will look for ways to leverage e-learning and/or include affected beneficiaries in the activities of the non-affected regions. The focus on consumer staples will reduce risk in the face of a downturn. Regardless, project interventions are geared at assisting countries to develop sustainable capacities for the long-term, and project interventions would likely help lessen the negative impact of any such crisis. The project has been developed in direct response to demand from beneficiary governmental and private sector stakeholders. As such, it is extremely unlikely that partners will not remain committed. Even so, any lack of interest, trust and/or buy-in will be overcome through the demonstration of concrete results that can be derived from cooperation. In addition, all areas of interventions will be demand driven. Project activities will be adjusted accordingly should there be limited interest. The project will provide a framework in which BSOs can monetise any improvements they make: by helping BSOs improve their ability to provide relevant services, and by helping them connect with new clients (project SME beneficiaries), the project provides BSOs with a direct incentive to implement project recommendations. By connecting SMEs to markets, the project will help transform improved business practices into concrete results (i.e. higher sales). In this way SMEs will be provided a direct incentive to change current practices. In addition, the selection of committed and dynamic participating SMEs will ensure a sufficient degree of [8]

107 recommendations; or are not ready to cost share Regional programmes have sometimes difficulties to be implemented in Belarus due to absence of financing agreement with the government and the need to register all actions L collaboration and cost-sharing. Smooth implementation in Belarus will be ensured through early notification of the government (Ministry of Foreign Affairs, Ministry of economy) about the programme, as well as possibly identifying a local partner (a BSO, for instance) to facilitate registration of the programme activities in Belarus especially when it comes to direct advisory services, grants, coaching, trainings etc. Sustainability of capacity building actions: trainings and workshops could have limited effect, if organised on an ad-hoc basis. Assumptions L The project will establish two regional liaison offices: one for the three Caucasus countries and one for the three Eastern European countries to ensure close contact with partner countries stakeholders and beneficiaries, including with the private sector. The political and security situation allows for the implementation of project activities and does not deteriorate to an unacceptable level. Local partners identified for capacity building have the internal capacity to absorb the intervention. National government partners remain committed and support project implementation. Trust is built among stakeholders. 3 LESSONS LEARNT, COMPLEMENTARITY AND CROSS-CUTTING ISSUES 3.1 Lessons learnt From the previous and ongoing programmes implementation under the SME flagship, such as East Invest, it can be concluded that there is a need to have a tailor made approach that is sector specific via concrete assistance and advice to a given sector and group of companies, to complement the more general support such as is implemented under East Invest to strengthen BSOs. In a recent European Commission commissioned study aimed at advising on the design of EU support to the private sector in the process of implementation of the AAs/DCFTAs, it was found that SMEs and BSOs had limited understanding of the implications of the DCFTA for SME companies and on how to benefit from it (management, technical and marketing capacities). However, among the majority of SMEs surveyed that wanted to export to the EU (predominance is amongst agricultural producers) 75% did not even know where to obtain information on exporting to the EU. The study therefore recommended to provide very specific know how and support to SMEs and BSOs and the best way to do this would actually be to take a more sectorial and value chain and supply chain approach to accompany EaP [9]

108 SMEs to increase their export competitiveness. Models and guidance manuals and best practise should be developed and encouraged on a sector by sector basis. The sectors to be targeted in each country have to be large enough to make the formation of associations sustainable; there need to be enough large successful firms to identify angels (usually a small percentage) with enough smaller entities and to justify any costs by EU associations. Therefore, the focus of such activities should be in sectors with a large number of SMEs in each country. 3.2 Complementarity, synergy and donor coordination The project will work closely with all relevant development projects and programmes in six beneficiary countries in order to avoid duplications, harness synergies, and ensure that the project builds upon the results achieved under other interventions. The project will thoroughly investigate opportunities for collaboration in each country during the development of the value chain roadmaps and the inception phase. At this stage, the most complementary EU-funded projects are as follows: - East Invest project: The East Invest project is a regional investment and trade facilitation project for the economic development of the Eastern Neighbourhood region, launched in the framework of the European Eastern Partnership initiative. It targets BSOs and SMEs from the 6 Eastern Partnership countries, with potential for developing mutual cooperation and investment relations with the European Union. East Invest contributes to the general business climate and to improved performance of SMEs. The proposed project can further build on these achievements by offering a range of technical assistance services, tailored to the specific needs of the selected value chains. In particular, the project will involve East Invest in consultations during the value chain road map development in order to identify areas for collaboration to increase impact of both projects. The project will also make use of all the studies and analysis conducted by the East Invest project, in particular, BSOs audits and gaps analysis. When possible, the trainings for BSOs will build upon the knowledge which BSOs have gained from East Invest Academy management trainings. - ENPARD (Armenia, Georgia and Moldova), the European Neighbourhood Programme for Agriculture and Rural Development, aims at supporting these three EaP countries in their rural and agricultural development. The main focus of the ENPARD technical assistance is at strengthening and formation of producer groups and providing support to them by building physical infrastructure as well as enhancing human capacities to increase value addition in the agribusiness sector. The proposed project will closely study the experience and lessons learnt of the ENPARD projects in all three countries to build upon the results achieved, and will closely cooperate and engage the already established producers groups in the target subsectors as beneficiaries of the project. - Small Business Support (SBS) implemented by EBRD. SBS programme is providing a wide range of capacity-building assistance to BSOs and SMEs in the EaP countries. The proposed project will leverage the results achieved by the SBS programme and utilize its consultants, when possible, for the provision of technical assistance to the [10]

109 agribusiness SMEs. This will help SBS beneficiaries reinforce their skills through onthe-job training and network with potential clients. - In Moldova, the International Trade Centre ITC will also need to coordinate with a number of projects involved in SME support, including: o DCFTA Technical Assistance Service Contract (EUR 2.5 million) covering quality infrastructure, market surveillance and Internal and external markets and Competitiveness awareness in a AA/DCFTA context; o Twinning light for MOLDAC (EUR 0.2 million) to "Support for the National Accreditation Centre MOLDAC"; o The EU High-Level adviser on economic development policy issues to the Ministry of Economy; o Support to Agriculture and Rural Development through Confidence Building Measures (EUR 6.5 million) which includes a component on local entrepreneurship and SMEs development; o the Comprehensive Institution Building Programme (CIB): twinning and technical assistance projects supporting the DCFTA implementation including support to Intellectual Property Rights, Customs Service, food safety agency (to enhance the commercial and export potential of the agro-business food chain in Moldova in line with EU standards and DCFTA technical requirements) o Several planned projects (Annual Action Programme 2016) including "Support to SMEs in rural areas"; "Technical assistance support to BSOs"; "Increase of competitiveness in agricultural sector" which includes facilitating access to markets and establishing market linkages through domestic and international value chain. - The on-going sector budget support to DCFTA-SME in Georgia, which purpose is to support the implementation of the DCFTA related institutional and regulatory reforms in Georgia, with a strong focus on strengthening the capacities of Georgian SMEs, both to increase their competitiveness and to ensure their adaptation to the new regulatory environment. The project will be implemented in four components (improvement of the enterprise development framework and SME participation in the political dialogue; capacity development for SME support institutions; Promotion of enterprise development via clustering and support to business networks on national, sector and local levels; Integration of business clusters and networks in relevant existing EU networks for enterprise development, investment and trade promotion. Additionally, supporting the development of SMEs and the creation of new jobs is one of the priorities of the Regional Development Programme EU Support to Ukraine to Re-launch the Economy (EU SURE ): The EUR 95 million project provides advice on legal approximation with the EU, capacity building and infrastructural support in priority areas covered by the EU-Ukraine Association Agreement. EU SURE will support the development of the SMEs via technical assistance including business advice, using a network of business support centres (BSC) in cooperation with the EBRD. The BSCs will connect local small businesses to a network of local consultants and international industry experts. Business advice will be tailored according to the size of the company and the [11]

110 complexity of the challenges. BSC will also advise SMEs on how to access to financing and how to adapt to and benefit from the establishment of the DCFTA between the EU and Ukraine. The project will also provide policy advice to complete the ongoing SMEs deregulation and the national and regional economic development strategies. A complementary Loan Guarantee Facility worth EUR 40 million will be run in cooperation with EIB. This loan facility will provide local commercial banks with an effective risk management tool to increase their capacity to absorb increased funding demand from SMEs. Support for small businesses is one of the measures identified with a view to increased competitiveness of regions in Ukraine's State Strategy of Regional Development for the period until Strengthening Private Initiative Growth in Belarus (SPRING). This programme is planned as part of the EU Annual Action Programme 2016 for Belarus. Component 1 focuses on promotion of small and medium enterprises as core engine of local and regional growth. It will be done through direct bilateral contribution to the EBRD Small Business Support programme with distinct regional and local focus: qualified business advice will target specifically local (rayon) level beneficiaries. Component 2 strives to support to economic initiative, competitiveness and innovation for local inclusive development. Indicative activities, planned to be implemented by UNDP, include supporting drafting and implementation of the local employmentgenerating strategies and action plans, as well as provide improved access to finance and related technical assistance through a funding facility (microfinance, grants) for micro, small and medium sized enterprises (MSMEs) and social enterprises to support the implementation of these strategies and plans. Considering the direct SME emphasis of this bilateral programme, necessary coordination should be ensured with the implementing organisations in Belarus: EBRD and UNDP. - Supporting SME Competitiveness Reforms in the EaP Countries- Implementing the recommendations of the SME Policy Index 2012 ( , EUR 2.5 million). This includes special support to Belarus on the Upgrading SME skills through Business Support Services. This project implemented by the OECD as a follow-up to the 2016 Small Business Act Assessment advises the government of Belarus on the implementation of concrete measures to support policy reform roadmap for SME support and enhance convergence with the SBA. - The EBRD Women in Business (WiB) Programme promotes and supports women entrepreneurship and more broadly women s participation in business by facilitating access to finance and advice for women-led SME. - The possible opening of the EIB operations to Belarus should be considered, as the project will also help SMEs access finance by connecting them to existing financing mechanisms. - The future twinning project on Supporting Accreditation System of Azerbaijan should be taken into account to avoid overlaps; in particular as one of the activities will be to "assist selected laboratories to prepare for international accreditation/certification" Accreditation plays indeed a very important role for increasing competitiveness of national economy and promoting its export potential. Accreditation according to international standards provides confidence to consumers, [12]

111 regulators, industry and other interested parties. It can facilitate trade, market access, fair competition and consumer acceptance of products on a national, regional and international level. Currently, Azerbaijani goods are often denied access to EU markets because they lack safety and compliance certificates from accredited certification bodies. Azerbaijani producers are not always aware of the necessity to get these certificates and if they know, they cannot test and certify their goods in Azerbaijan: they have to use foreign services of accreditations to get internationally recognised certificates. This increases the price of the goods to be exported and contributes to poor competitiveness of many Azerbaijani non-oil goods. Supporting the testing laboratories towards international accreditation will be beneficial to both laboratories and the private sector. - Regarding the development by ITC of roadmap or strategy for selected value chains in the agribusiness sector, coordination will need to be ensured in Azerbaijan as EU experts already developed selected value chain analysis in agribusiness (upon request from the government). These results should be analysed to avoid duplication. In some countries, like Azerbaijan, the government has or is developing export promotion strategy. The ITC project should be aware of these strategies and ensure coordination with the European Commission support towards these strategies' implementation. - Support to Rural and Regional Development project in Azerbaijan ( ; EUR 3.25 million) This project will a) strengthen national and local authorities' capacities to plan, implement and administer programmes directed to enhance socioeconomic development of regions; and b) support local and national authorities in the prioritization, identification and appraisal of sustainable regional investment projects that have a clear strategic impact in the development of regions and that can be further financed through blending mechanisms and/or state budget. - Overall coordination will also need to be ensured with the Enterprise Europe Network (EEN). EEN consortia are already in place in all EaP countries except Azerbaijan. They provide a number of services to SMEs including match-making, brokerage events, participation in trade fairs, information provision on EU laws and laws in partner countries. ITC should work with the EEN consortia on the ground and include them in their activities (also in order to enhance their capacity). The proposed project will also explore ways for cooperation with other donors that currently provide trade related support in the six countries, including: World Bank 7, International Finance Corporation (IFC), American development agency USAID, Canadian development agency CIDA (for Ukraine) and Swedish development agency SIDA. 3.3 Cross-cutting issues The project will place particular focus on enhancing women s economic empowerment, enabling job creation for youth, minimizing negative environmental impacts, and introducing corporate social responsibility principles to the regions SMEs. This will be done by including 7 In Azerbaijan for example, the World Bank agriculture competitiveness improvement project is intending to produce about 10 value chain analyses. [13]

112 gender related indicators (i.e.: % of women owned SMEs). Youth employment will be enabled by creating greater job opportunities for young people by stimulating economic activities in the rural areas. The project will be mainstreamed such that it: ensures equal opportunities for women; avoids negative environmental impacts; and promotes youth employment and/or entrepreneurship. As a labour intensive value chain, the agribusiness sector (which has been preliminarily identified as a priority) provides significant potential for social inclusion of marginalized people, increasing their share of the total value of production. In addition, there are low barriers to entry for poorer producers (capital, knowledge, regulations etc.). As such, the sector serves as a driver of employment, entrepreneurial activity, and income generation for under-served people, including women and youth with few other earning opportunities. With regards to the environment, the project will ensure the propagation of environmentally friendly production methods during its trainings and technical assistance to both enterprises and BSOs. Consumers, particularly in the EU, are becoming more demanding, requiring vegetables of a higher quality that are produced in sustainable manner. Although current production methods in the target countries are not always environmentally sound, the sector s long-term survival will require environmentally appropriate production to be marketable. In addition, the need for companies to apply the EU standards will also lead to a more environmental sustainable production. Furthermore, the project may include awareness building workshops on environmental issues and organic agriculture. 4 DESCRIPTION OF THE ACTION 4.1 Objectives/results The project will help SMEs from the six Eastern Partnership countries improve their competitiveness aiming towards an increased integration into domestic, regional and global value chains and markets, with a focus on the European Union. The project s objective will be achieved through the following outputs: Output 1: Roadmap (strategy) developed for selected value chains in each country Output 2: Capacities of SMEs strengthened to increase value added production and improve competitiveness Output 3: Capacities of sectoral BSOs enhanced to provide SMEs with quality and relevant services along selected value chains Output 4: Business linkages created for SMEs to expand sales in domestic and international markets and value chains, in particular the EU 4.2 Main activities In particular, the following activities will be implemented: Output 1: Roadmap (strategy) developed for selected value chains in each country Activity 1.1: Conduct analysis of the selected value chains and identify constraints and opportunities for SME competitiveness, based on public-private consultations [14]

113 Activity 1.2: Validate findings and strategic orientations of roadmaps through organising public-private forums in beneficiary countries Activity 1.3: Draft and finalize value chain development roadmap documents, including country specific technical assistance solutions, to enhance international competitiveness Activity 1.4: Select group of beneficiaries (enterprises and their supplier/producer clusters) based on supply potential, enterprise characterisation studies, and commitment to cost-sharing, in each beneficiary country. The level of cost-sharing will be determined during the inception phase and customised for each beneficiary country Activity 1.5: Identify potential buyers in the domestic, EU and other target markets, including EaP countries, interested to source in the region and engage them from the start of the project. Output 2: Capacities of SMEs strengthened to increase value added production and improve competitiveness Activity 2.1: Conduct awareness-raising and information events on key issues critical for trade success in domestic and global markets with focus on the European market (including CSR and core labour standards) Activity 2.2: Develop doing-business guides for targeted sectors with focus on DCFTA requirements together with other tools, such as business, market (access) and import/ export intelligence studies, in order to provide tailor-made information to SMEs Activity 2.3: Provide coaching, training and business advisory services to pilot group of SMEs in areas identified and outlined in the value chain development roadmaps Activity 2.4: Conduct cost/benefit analysis on the establishment of producers groups and/or other forms of SMEs clusters with the aim to improve sector competitiveness Activity 2.5: Raise awareness of equipment supplied by European manufacturers and link with EU suppliers Activity 2.6: Connect SMEs to financing facilities and investors, where possible. Output 3: Capacities of sectoral BSOs enhanced to provide SMEs with quality and relevant services along the value chains 8 Activity 3.1: Assess capacities of sectoral BSOs to meet the needs of SMEs in the selected domestic and global value chains (both service provision and management) Activity 3.2: Develop specialised service portfolio for selected sectoral BSOs, and/or establish new entities (such as sector trade associations or sector task force), when needed, to fill in the gaps in sector support infrastructure Activity 3.3: Conduct training for sectoral BSOs (existing or new) on key areas for improvement in areas identified and outlined in the value chain development roadmaps. 8 Grants may be provided to partner BSOs for capacity-building activities, where appropriate (see paragraph on grants, page 19). [15]

114 Activity 3.4: Establish an information-knowledge sharing platform and facilitate technical and commercial collaboration linkages with professional institutions and sector organisations from the target markets. Output 4: Business linkages created for SMEs to expand sales in domestic and international markets and value chains, in particular the EU Activity 4.1: Prepare SMEs for participation in trade fairs and enhance their skills on marketing and sales strategies through training and advisory services Activity 4.2: Develop networks of potential buyers, both domestic and international, for the target product groups in each country Activity 4.3: Outline profiles and prepare SME marketing material to be promoted towards potentially interested international and European buyers and investors Activity 4.4: Facilitate partnerships with buyers, finance providers and investors (both domestic and international) by helping SMEs participate in technical study tours, technical collaboration meetings, trade fair participation and buyer/seller meetings Activity 4.5: Develop e-trade platforms to facilitate access to domestic and global markets (the need to be confirmed by the value chain analysis) Activity 4.6: Plan and organise buyers/investors country visits, providing support to beneficiary SMEs in the match making 4.3 Intervention logic The project will start with an inception phase, which will last around 6 months. During this period, the sectoral focus for the project will be validated, and priority product groups will be identified through expert analysis and stakeholder consultations in the six EaP countries according to their development priorities and export potential (minimum one product group per country). Existing countries' value chains sectoral studies will be assessed during the inception phase. For example, in the case of Georgia, under the sector budget support programme DCFTA- SME, the Enterprise Development Agency Analytical Unit is already requested to conduct every year at least 2 SME sectorial value chain studies. A recent one has been focused on the export potential of Georgian herbal market. During the inception phase, the project will also perform the tasks required to set up an appropriate project management and implementation infrastructure. OUTPUT 1: The project will conduct a thorough value chain analysis for the selected product groups in each country to identify bottlenecks, market inefficiencies and opportunities for value chain and trade development. This will involve inclusive consultations with sectoral stakeholders (both public and private). The work will also include mapping and assessment of capacities of sectoral BSOs and networks along the value chains. The results of the value chain analyses will be used to formulate country-specific value chain development roadmaps for the selected subsectors/product groups. These will include labour-oriented regulatory framework. These roadmaps will detail specific technical assistance solutions and [16]

115 activities for each country that will allow the target subsectors to increase value addition and integration into domestic, global and EU value chains and markets. Following the development of these roadmaps, the project will select an initial group of pilot SMEs based on the capabilities of entrepreneurs, motivations for growth, access to additional factors of production, initial levels of product/service quality compliance, and commitment to cost sharing. OUTPUT 2: The capacities of SMEs to produce goods in accordance with global and EU market demands will be enhanced by implementing the activities detailed in the country specific value chain development roadmaps. SME-level assistance will be delivered through direct advisory services, coaching and trainings. Support areas may comprise: supply chain management, quality management and packaging, marketing strategies and sales, financing options, trade promotion and trade fair participation. The project may also include awareness building workshops on organic agriculture and its environmental benefits. The project will involve local BSOs in all project and training activities, strengthening them as appropriate, and using international technical expertise only to the extent that qualified local expertise is unavailable. Awareness raising and information workshops and seminars will also be conducted on the requirements for access to international and EU markets. For Georgia, Moldova, and Ukraine, particular focus will be placed on technical sector-specific aspects of the DCFTA, including the administrative and production process, standards and investment needs, as well as the changes to market regimes in both their own countries and the EU. Practical support to SMEs will be provided to help them understand the changes resulting from AA/DCFTA and assist them to comply with the new requirements. Furthermore, the project will facilitate investment opportunities for SMEs. To this end, the project will help SMEs access finance by connecting them to existing financing mechanisms, for example, the facilities of the EIB and EBRD. This will be done by raising awareness of opportunities and building capacities so as to make SMEs better equipped for such financing. OUTPUT 3: The project will also improve sector-specific business development services in each country as well as existing regional sector-specific BSOs. Interventions and capacitybuilding activities for sectoral BSOs or other private business services providers will be designed based on the value chain development roadmaps 9. Preliminary areas for support include: sectoral trade intelligence, quality management and certification procedures, marketing strategies, trade fair participation and financing options. For Georgia, Moldova and Ukraine, special attention will be given to the thematic topics related to AA/DCFTA requirements, such as technical regulations, standards, conformity assessment and labelling, SPS measures, genetically modified organisms (GMO) provisions, etc. In addition to benefiting from direct training, BSOs will have the opportunity to expand their skills and network with potential clients by participating in training and consulting events for sector SMEs. Moreover, mechanisms for cooperation between European and other international counterparts will be created or strengthened. This will serve to facilitate 9 Vocational education and training (VET) centres/councils - as a form of BSOs - could also be supported along each value-chain process. [17]

116 knowledge transfer and open up new business opportunities for export-oriented SMEs. When necessary and if resources permit the project will assist selected laboratories to prepare for international accreditation/certification. OUTPUT 4: Special focus will be placed on developing linkages for pilot SMEs with valuechains and markets so that improvements in SMEs competitiveness result in business generation and the establishment of potential joint ventures. In particular, the Project will help SMEs to identify potential buyers, both domestic and international, in pursuit of their trade objectives. SMEs that are currently able to export will be linked to the global and EU target markets. The project will also help SMEs to prepare for and organize trade fair participation in target markets, study tours, buyer/seller meetings, etc. Moreover, SMEs will be shown how to evaluate and choose between various sales strategies by performing market and value chain risk analyses, calculating landed costs, and evaluating financing requirements. The project will ensure continuous monitoring of the implementation of outputs. This will allow project activities to be adapted to changing circumstances, EaP countries beneficiaries evolving needs, and developments in international markets. Particular attention will be paid to the achievement of sustainable results that are beneficial to a significant number of SMEs and BSOs beyond the duration of the project. Country management and implementation It is envisaged that two regional project liaison offices will be established in two countries for managing project activities: one for Caucasus countries (Armenia, Azerbaijan and Georgia) and one for East European countries (Belarus, Moldova and Ukraine). The exact locations will be selected during the project inception phase in close consultation with the EU and the partner countries. Regional Programme Managers (RPMs) will be appointed to administer and coordinate the project activities for the two respective groups of countries. RPMs will also liaise with the public and private sector BSOs and the business community, and co-operate locally with other donor projects. Furthermore, the country level implementation will be supported by national consultants in each country who will work closely with the RPMs and ITC headquarters. The national consultants will also provide technical inputs for different project activities. 5 IMPLEMENTATION 5.1 Financing agreement In order to implement this action, it is not foreseen to conclude a financing agreement with the partner country, referred to in Article 184(2)(b) of Regulation (EU, Euratom) No 966/ Indicative implementation period The indicative operational implementation period of this action, during which the activities described in section 4.1 will be carried out and the corresponding contracts and agreements implemented, is 54 months (indicative duration of the contract is 36 months) from the date of adoption by the Commission of this Action Document. [18]

117 Extensions of the implementation period may be agreed by the Commission s authorising officer responsible by amending this decision and the relevant contracts and agreements; such amendments to this decision constitute technical amendments in the sense of point (i) of Article 2(3)(c) of Regulation (EU) No 236/ Implementation modalities Indirect management with international organisation This action may be implemented in indirect management with the International Trade Centre (ITC) in accordance with Article 58(1)(c) of Regulation (EU, Euratom) No 966/2012. ITC is a joint agency of the World Trade Organization and the United Nations, and is dedicated to the internalisation of SMEs. As regards its compliance with the Financial Regulation requirements for indirect management, ITC falls under the umbrella of the United Nations General Secretariat. This implementation entails assistance to SMEs from EaP countries to integrate them into the global and European value chains and markets. This implementation is justified because ITC s core activity is holistic sector value chain development conducted through wide participation of beneficiaries and aligned with specific market and social development objectives. ITC has a unique track record of connecting SMEs to value chains, building sustainable market linkages and delivering positive development outcomes, in wide range of sectors of economy. Furthermore, ITC has a long-lasting cooperation in Eastern Europe and Central Asia. For over 25 years it has worked in the region, providing technical assistance in priority areas such as WTO accession, trade and sectoral value chain based strategies, sector BSO strengthening, trade facilitation, SMEs competitiveness and quality management. ITC is also directly linked to the WTO. ITC will implement the action in cooperation with the Dutch Centre for Promotion of Imports from developing countries (CBI), which is part of the Netherlands Enterprise Agency and is commissioned by the Ministry of Foreign Affairs of the Netherlands. It was established to support producers/exporters to get a foothold on the market in the Netherlands, support to Business Support Organisations in improving their capabilities and to act as a Matchmaker between suppliers and buyers. Its activities cover the whole EU. ITC s strong expertise in offering practical solutions to increase SME competiveness along value chains combined with CBI s strong knowledge of European markets and importer networks represent a unique partnership which will allow efficiently and effectively delivering results of the project and maximising its impact on the beneficiary countries. One of the services that CBI offers to SMEs is market intelligence, providing up-to-date insights on the EU market and a valuable source of intelligence for exporters to prepare and maintain their export marketing activities. CBI market intelligence is produced by experienced CBI market researchers, in collaboration with CBI sector experts. Both organisations together have strong track record and success in supporting business development organisations worldwide, which will further reinforce the sustainability of the project. The entrusted entity would carry out the following budget-implementation tasks: [19]

118 - Grants with local implementing partners, mainly institutions. This mechanism will add to local ownership and sustainability and should entail an inherent capacity building element for the grantee; - Procurement of commercial contracts. The entrusted international organisation is currently undergoing the ex-ante assessment in accordance with Article 61(1) of Regulation (EU, Euratom) No 966/2012. The Commission s authorising officer responsible deems that, based on the compliance with the ex-ante assessment based on Regulation (EU, Euratom) No 1605/2002 and long-lasting problem-free cooperation, the international organisation can be entrusted with budget-implementation tasks under indirect management 5.4 Scope of geographical eligibility for procurement and grants The geographical eligibility in terms of place of establishment for participating in procurement and grant award procedures and in terms of origin of supplies purchased as established in the basic act and set out in the relevant contractual documents shall apply. The Commission s authorising officer responsible may extend the geographical eligibility in accordance with Article 9(2)(b) of Regulation (EU) No 236/2014 on the basis of urgency or of unavailability of products and services in the markets of the countries concerned, or in other duly substantiated cases where the eligibility rules would make the realization of this action impossible or exceedingly difficult. 5.5 Indicative budget EU contribution in EUR Indirect management with ITC Total Organisational set-up and responsibilities Implementation of the projects shall be monitored by a steering committee chaired by the Commission (Directorate-General for Neighbourhood and Enlargement Negotiations) and shall include representatives of any other concerned services of Commission, ITC as well as CBI. The steering committee will be responsible for monitoring the implementation of the project on the basis of the progress reports presented by the ITC. The steering committee shall meet at least once a year. Annual activity reports shall be drafted and structured on the basis of the results/outcomes that have been achieved. This project will be part of the Eastern Partnership SME Flagship and will therefore also be included in the annual steering committee meeting of the SME Flagship to ensure complementarity with other EU funded initiatives. The SME Flagship Secretariat is preparing [20]

119 a consolidated report on the SME Flagship impact and results. This will also include results achieved under this project. Annual steering committee meeting in each of the six EaP countries could also take place to further ensure coordination with other related programmes funded by the EU or by other donors, as well as to enhance the ownership of the project by the partner countries (government representatives, BSOs, SMEs). The project's team leader/regional programme managers will attend donor coordination group/workshop on private sector development in all EaP countries. The ITC will also conduct a quarterly Technical meetings at national level with EU Delegations and relevant stakeholders to monitor project activities, ensure synergy and complementary with other EU funded and donor actions. 5.7 Performance monitoring and reporting The day-to-day technical and financial monitoring of the implementation of this action will be a continuous process and part of the implementing partner s responsibilities. To this aim, the implementing partner shall establish a permanent internal, technical and financial monitoring system for the action and elaborate regular progress reports (not less than annual) and final reports. Every report shall provide an accurate account of implementation of the action, difficulties encountered, changes introduced, as well as the degree of achievement of its results (outputs and direct outcomes) as measured by corresponding indicators, using as reference the logframe matrix. The report shall be laid out in such a way as to allow monitoring of the means envisaged and employed and of the budget details for the action. The final report, narrative and financial, will cover the entire period of the action implementation. The Commission may undertake additional project monitoring visits both through its own staff and through independent consultants recruited directly by the Commission for independent monitoring reviews (or recruited by the responsible agent contracted by the Commission for implementing such reviews). 5.8 Evaluation Having regard to the nature of the action, a mid-term evaluation will be carried out for problem solving and learning purposes. This evaluation may be carried out by independent consultants contracted by the Commission or through a joint mission via an implementing partner. The Commission shall inform the implementing partner at least 3 months in advance of the dates foreseen for the evaluation missions. The implementing partner shall collaborate efficiently and effectively with the evaluation experts, and inter alia provide them with all necessary information and documentation, as well as access to the project premises and activities. The evaluation reports shall be shared with the partner countries and other key stakeholders. The implementing partner and the Commission shall analyse the conclusions and [21]

120 recommendations of the evaluations and, where appropriate, in agreement with the partner countries, jointly decide on the follow-up actions to be taken and any adjustments necessary, including, if indicated, the reorientation of the project. The financing of the evaluation shall be covered by another measure constituting a financing decision. 5.9 Audit Without prejudice to the obligations applicable to contracts concluded for the implementation of this action, the Commission may, on the basis of a risk assessment, contract independent audits or expenditure verification assignments for one or several contracts or agreements. The financing of the audit shall be covered by another measure constituting a financing decision Communication and visibility Communication and visibility of the EU are a legal obligation for all external actions funded by the EU. Communication and visibility will be given high importance during the implementation of the Action. This action shall contain communication and visibility measures which shall be based on a specific Communication and Visibility Plan of the Action, to be elaborated at the start of implementation and supported with the budget indicated in section 5.5 above. In terms of legal obligations on communication and visibility, the measures shall be implemented by the entrusted entities Appropriate contractual obligations shall be included in the delegation agreement. The Communication and Visibility Manual for European Union External Action shall be used to establish the Communication and Visibility Plan of the Action and the appropriate contractual obligations. Additional Visibility Guidelines developed by the Directorate- General for Neighbourhood and Enlargement Negotiations shall be followed where relevant. Visibility and communication actions shall demonstrate how the intervention contributes to the agreed programme objectives. Actions shall be aimed at strengthening general public awareness and support of interventions financed and the objectives pursued. The actions shall aim at highlighting to the relevant target audiences the added value and impact of the EU's interventions. Visibility actions should also promote transparency and accountability on the use of funds. It shall be the responsibility of the implementing partners to keep the EU Delegations fully informed of the planning and implementation of the specific visibility and communication activities. The implementing partners shall report on visibility and communication activities in the report submitted to the ENI monitoring committee and the sectoral monitoring committees. [22]

121 The action shall use common branding regarding all EU support to SME in the Eastern Partnership, in particular, the name EU for Business (EU4Business) shall be used for all relevant SME activities both in English and in local official languages. [23]

122 APPENDIX - INDICATIVE LOGFRAME MATRIX (FOR PROJECT MODALITY) 10 The activities, the expected outputs and all the indicators, targets and baselines included in the logframe matrix are indicative and may be updated during the implementation of the action without an amendment to the financing decision. The indicative logframe matrix will evolve during the lifetime of the action: new lines will be added for listing the activities as well as new columns for intermediary targets (milestones) when it is relevant and for reporting purpose on the achievement of results as measured by indicators. Intervention logic Indicators Baselines (incl. reference year) Targets 11 (incl. reference year) Sources and means of verification Assumptions 10 Mark indicators aligned with the relevant programming document mark with '*' and indicators aligned to the EU Results Framework with '**'. 11 All targets are indicative. The targets will be validated, and revised during the inception phase. All targets are set for the entire project duration period. [24]

123 The project will contribute to the increased integration of EaP countries SMEs into domestic and global value chains and markets with focus on the EU - Total sector trade between the EaP region and global markets - Total sector trade between the EaP region and EU countries To be collected during the inception phase 12 - National statistics - SME surveys - All assumptions under Outcome / outputs (see below) Overall objective: Impact - Inward Investment flows to the EaP region (within the target sector) per partner country To be defined during the inception phase 12 During the inception phase, individual requests will be made to each country statistical services to obtain the data on investment flows in the target sector. [25]

124 Increased competitiveness and export growth of SMEs from Eastern Partnership countries - Number of SMEs reporting improved international competitiveness 13 - Number of SMEs reporting improved international competitiveness that are women owned/operated/control led or with majority women employed 14 - Exports of pilot SMEs compared to baseline To be collected during the inception phase - min 200 max min 60 max 80 To be defined during the inception phase - Baseline study for participating enterprises - After event reports/feedback forms /training evaluations - Project progress reports - Final report - National statistics - SME surveys - National government partners remain committed - Trust is built among stakeholders - SMEs are open to changing existing practices; are committed to implementing project recommendations; and are ready to cost share - BSOs have sufficient absorption capacities; are open to collaborating with the project; and are willing to implement project recommendations and introduce new/improved services to their clients Specific objective(s): Outcome(s) - Number of new markets accessed by SMEs - Number of SMEs that have transacted business, both internationally and domestically 15 - Number of SMEs that have transacted international business are women owned/operated/control led or with majority women employed - Number of sectoral BSOs reporting improved services and/or operational performance - min 1 max 3 per country - min 20 max 30 per country - min 6 max 10 per country - min 18 max Number of SMEs reporting changes in their business practices as the result of project trainings and advisory services. 14 This indicator will be fine-tuned after inception phase, when the structure of the target sector is analysed. 15 Number of SMEs transacting sales or purchases with a foreign or domestic firm as a result of project support. [26]

125 Output 1 Roadmap (strategy) developed for selected value chains in each country - Value chain analysed for the selected sector / product groups in each country(at least one per country) - Number of roadmaps developed for each country (at least one per country) At least one value chain analysis per country At least one roadmap per country - Roadmaps / intervention strategies endorsed by regional stakeholders and published - Project reports and evaluation forms - National government partners are committed - Trust is built among stakeholders - SMEs are willing to share sensitive information - There is sufficient interest in selected areas of intervention [27]

126 Capacities of SMEs strengthened to increase value added production and improve competitiveness 16 - Number of training courses, seminars and workshops conducted - Number of advisory services provided - Number of SMEs trained - Number of SMEs trained that are women owned/operated/control led or with majority women employed - Number of participants at workshops - Number of women participants - Number of participants of the workshops reporting increased knowledge of the specific subject area - min 70- max advisory services per country - min 250- max Min 75 max min max min 500 max % participants - Project monitoring reports - After event evaluation reports/feedback forms - Company surveys/baseline analysis - Trust is built among stakeholders - SMEs are open to changing existing practices; are committed to implementing project recommendations; and are ready to cost share - Number of SMEs introduced quality management principles to align with EU requirements - min 30 max 50 - increased volume of production/sales 16 Priority capacity building areas for SMEs - increased will be number defined in of the roadmaps based on value chain analysis. employees Output 2 [28]

127 Output 3 Output 4 Capacities of sectoral BSOs enhanced to provide SMEs with quality and relevant along the value chains Business linkages created for SMEs to expand sales in domestic and international markets and value chains, in particular the EU - Number of training courses, seminars and workshops conducted - Number of BSOs trained -Number of participants - Number of women participants - Number of new/improved services provided by sectoral BSOs - Number of trade fairs/buyer-seller meetings attended by beneficiaries - Number of companies participating - Number of womenowned companies participating -Number of business contacts made as a result of participation in trade fairs/buyerseller meetings - min 25 max 35 - min 30- max 50 - min 450- max min 180 max per country - 3 per country - min 45 max 60 per country - min 14 max 18 per country - min 400 max 800 per country - Project reports - After event reports/feedback forms - Survey of selected BSOs - Company surveys - After event evaluation reports - Company sales figures (reported by companies) - Project reports - Trust is built among stakeholders - BSOs have sufficient absorption capacities; are open to collaborating with the project; and are willing to implement project recommendations and introduce new/improved services to their clients - SMEs are open to changing existing practices; are committed to implementing project recommendations; and are ready to cost share [29]

128 This action is funded by the European Union ANNEX 6 of the Commission Implementing Decision on the ENI East Regional Action Programme 2016 and 2017, Part I Action Document for EU4Youth programme INFORMATION FOR POTENTIAL GRANT APPLICANTS WORK PROGRAMME FOR GRANTS This document constitutes the work programme for grants in the sense of Article 128(1) of the Financial Regulation (Regulation (EU, Euratom) No 966/2012 in sections and concerning calls for proposals. 1. Title/basic act/ CRIS number 2. Zone benefiting from the action/location 3. Programming document EU4Youth programme CRIS numbers: ENI/2016/ and ENI/2017/ financed under the European Neighbourhood Instrument Eastern Partnership countries: Armenia, Azerbaijan, Belarus, Georgia, Republic of Moldova, Ukraine. The action shall be carried out at the following locations: Eastern Partnership countries; EU Member States; Erasmus+ Programme countries: EU Member States, Former Yugoslav Republic of Macedonia, Iceland, Liechtenstein, Norway, Turkey. Regional East Strategy Paper ( ) and Multiannual Regional Indicative Programme for the Neighbourhood East 4. Thematic area Youth 5. Amounts Total estimated cost: EUR [1]

129 concerned Total amount of EU budget contribution: EUR , of which: - EUR from the general budget of the European Union for 2016; and - EUR from the general budget of the European Union for 2017, subject to the availability of the appropriations provided for in the draft general budget of the Union for 2017, following the adoption of that budget by the budgetary authority or as provided for in the system of provisional twelfths. This action is co-financed by potential grant beneficiaries for an indicative amount of EUR Aid modality and implementation modalities Project Modality Result 1: direct management call for proposals (by the Education, Audio-visual and Culture Executive Agency EACEA) Result 2: direct management call for proposals Result 3: direct management - procurement of services 7. DAC code Social/ welfare services; Employment 8. Markers (from CRIS DAC form) 9. Global Public Goods and Challenges (GPGC) thematic flagships General policy objective Participation development/good governance Aid to environment Gender equality (including Women In Development) Trade Development Reproductive, Maternal, New born and child health RIO Convention markers Biological diversity Combat desertification Climate change mitigation Climate change adaptation Not relevant Not targeted x x x Not targeted x x x x x Significant objective Significant objective x Main objective Main objective [2]

130 SUMMARY Youth is one of the main focuses of the 2015 European Neighbourhood Policy Review: lack of opportunity, particularly for youth, is considered to be one of the roots of instability, vulnerability and radicalisation. Economic development and the prospects for youth, especially with regards to employment opportunities, employability and civic engagement, are highlighted as a key to stabilise societies in the Neighbourhood. Supporting this target group in the Eastern Partnership (EaP) seems particularly important as all countries are characterised by high unemployment rates of young people and low participation of women in the labour market. This is due inter alia to skills mismatch, insufficient key competences 1 and entrepreneurial spirit, not inclusive education and training, and lack of active labour market policies and activation strategies 2. In this context, the objective of the EU4Youth (EU4Y) programme is to foster the active participation of young people in society and their employability in the economy by developing those skills that can support them in becoming leaders and entrepreneurs 3. The development of coherent and cross-sectorial youth policies is of key importance to tackle the challenges facing young generations. Through support to youth workers and youth organisations these entities will gain expertise and capacity to engage in constructive dialogue at national, regional or local level, and support policy development and implementation. This is of pivotal importance, as the achievement of tangible results will require that the EU4Y programme is aligned with relevant policy dialogues supporting reforms and policy actions with impact on young people (e.g. discussions in relevant EaP Platforms and Panels, policy actions supported by ETF, capacity building projects). The EU4Y programme is made up of three components. Component 1 will empower young people with key competences and skills supporting their active participation in democratic life. Citizenship, entrepreneurship and leadership will be the main topics of capacity building actions targeting youth organisations, youth workers and leaders. The latter will be able to apply for Civil Society Fellowships to enhance their skills on policy development. Component 2 will aim to increase the educational and training opportunities and improve the employment perspectives for all youth. Particularly, this component will address challenges to youth entrepreneurship and disadvantaged youth by giving grants to those organisations that propose initiatives in this field and by identifying actions with significant potential for systemic 1 Recommendation 2006/962/EC of the European Parliament and of the Council of 18 December 2006 on key competences for lifelong learning [Official Journal L 394 of ]. 2 "Active labour market policies and activation strategies were designed to promote labour market integration by reducing jobfinding obstacles, thereby increasing the probability of entering employment successfully by providing, for instance, job-related training that improves skills levels and productivity of jobseekers or through hiring subsidies designed to compensate for lack of work experience and other deficits". Source: ILO, Employment Working Paper No. 16 "Promoting youth employment through activation strategies", More broadly, in developing more autonomy to move their way through the world of work. The definition of entrepreneur is often related to business only, but here we would also include the more general meaning of it. Entrepreneurial spirit, in fact, "is characterized by innovation and risk-taking, and is an essential part of a nation's ability to succeed in an ever changing and increasingly competitive world". Source: [3]

131 impact 4. Component 3 will ensure the effective functioning of the programme by (i) exploring synergies among all components, (ii) supporting the steering committee in its coordination and monitoring functions and (iii) through communication and visibility activities. In addition, this component will support the alignment of the EU4Y programme with relevant policy dialogues and actions, thus ensuring the streamlining of youth issues at national and international level, and the sustainability of the EU4Y actions. Through all actions particular attention will be devoted to disadvantaged youth 5 involvement of young women. and to the 1 CONTEXT 1.1 Regional context The EU Summit held in Riga on May 2015 identified economic growth and employability, particularly for youth, as one of the top priorities for action. This was also confirmed in the Review of the European Neighbourhood Policy 6 (ENP Review) which established fostering youth employment and employability as one of its key objectives. The Review considers this issue crucial to stabilise neighbouring countries and to support their economic development. Investing in youth allows not only to increase the pool of talented young people, but also to cooperate with young men and women from EaP and other countries on core aims of the EaP, such as democracy and good governance. It will foster young people's intercultural dialogue and strengthen the links between the youth field, the civil society and the labour market. The situation in the region is alarming: according to the latest (August 2015) European Training Foundation (ETF) Report on Young People Not in Employment, Education or Training (NEETs), the NEET rate (15 24 years) represents a more serious problem in the region overall than in the EU. Youth unemployment is twice or three times higher than overall unemployment and much higher than the EU average 7 in Armenia (37.2%) and Georgia 30.8%) 8. This is due inter alia to skills mismatch, insufficient foundations skills and entrepreneurial skills and spirit, not inclusive education and training, and lack of active labour market policies and activation strategies. 4 Such activities should aim at producing effects that go beyond supporting the single applicant and trigger a larger effect with a potential systemic impact and inspire reforms at national level. 5 All those young people experiencing personal difficulties/obstacles, limiting/preventing them from taking part in transnational projects. The obstacles/difficulties may be: mental, physical, sensory or other disabilities; education difficulties (learning difficulties, early-school-leavers, etc.); economic obstacles (low standards of living, low income, etc.); cultural differences (immigrants/refugees/their descendants, national/ethnic minorities, etc.); chronic health problems; social obstacles (discrimination due to gender, age, etc.); limited social skills, anti-social or risky behaviours, precarious situations, (ex- )offenders, (ex-)drug or alcohol abusers, young and/or single parents, orphans; geographical obstacles (people from remote rural areas, small islands or peripheral regions). Reference: Erasmus+ Programme Guide. 6 Review of the European Neighbourhood Policy - Joint Communication to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, JOIN(2015)50, % in According to the same ETF Report the data on youth unemployment for the other EaP countries are the following: Ukraine 23%, Azerbaijan 13.5%, Belarus 12% and Moldova 9.8%, [4]

132 Such situation calls for action, since the NEET status can have a long-lasting negative impact, a scarring effect. In addition, if young people are at higher risks of future unemployment, they are also at higher risk of exclusion, of poverty and of facing health problems 9. This is why the 2 nd Eastern Partnership Youth Forum, an event organised in Riga on 9-11 February 2015 within the framework of the EU Latvian Presidency and the Eastern Partnership Platform 4 Contacts between people, called to step up action on fostering young people's employability and employment, education, volunteering and cross-sectorial youth cooperation. The 230 participants from more than 30 different countries including young people, youth workers and representatives of the labour market, formal education and research, ministries as well as international institutions endorsed recommendations on these policy areas and invited the European Commission to dedicate a programme to young people in Eastern Partnership countries. The ENP Review Communication suggested setting-up a specific panel on Youth employment and employability within the Eastern Partnership. In response to this appeal, the new programme EU4Y should take into account and build on earlier measures implemented to support youth cooperation with the Eastern Partnership countries and explore all synergies with the on-going actions, in particular those under the Erasmus + Programme ( ). Erasmus+ provides support in line with the EU Youth Strategy ( ), and through international non-formal learning activities between young people and youth workers from the Eastern Partnership Countries and the Erasmus+ Programme countries. In 2015 alone, the Erasmus+ Programme involved close to young people and youth workers from the Eastern Partnership countries and the Erasmus+ Programme countries into joint projects, namely: 'Youth exchanges', 'European voluntary service' projects, 'Mobility of youth workers', 'Meetings between young people and decision makers in the field of youth'. Stakeholders express a high demand for a dedicated action focusing specifically on the challenges of young population at regional level. Such approach was implemented through the previous Eastern Partnership Youth Window (EPYW, ) under the Youth in Action Programme ( ) and the new action should build on the results achieved and the key lessons learned: the EPYW was most useful in supporting young people s needs in the areas of participation and active citizenship, intercultural learning and mobility, employability and empowerment. It had a significant impact on strengthening civil society in the EaP countries. The EPYW also contributed to legitimising youth work and youth policy as credible and important sectors of civil society. The key lessons and challenges related to the engagement of disadvantaged people, monitoring and communication as well as the regional dimension should be addressed by the new programme (see section 3 below for further details). 9 Moving Youth into Employment - Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, COM(2012)727, [5]

133 1.2 EU Policy Framework Youth is a priority for the EU, which has developed a youth policy at EU level since Its legal basis is Article 165 of the Treaty on the Functioning of the European Union, which provides for encouraging the development of youth exchanges and exchanges of socioeducational instructors, and the participation of young people in the democratic life of Europe. In November 2009, the European Council adopted the 'Resolution on a renewed framework for European cooperation in the Youth Field ( )' 11, the so-called 'EU Youth Strategy ( )'. The latter has two overall objectives: to provide equal opportunities for young people (aged 13-30) in education and in the labour market and to encourage young people to be active citizens and participate in society. The Strategy is the basis for the cooperation between Member States with an outreach also to regions outside the EU and in particular the European Neighbourhood countries. A number of actions have been rolled-out over the last years, to promote investing in young people and their future, notably the Youth Guarantee 12 and the European Alliance for Apprenticeship 13, both aiming to support young people's successful transition into work. Whilst these are not directly applicable to ENP countries, the objectives they pursue as well as the approaches they promote, can be an inspiration for the Neighbourhood countries. The ENP provides a framework for closer relations between the EU and its neighbouring countries, which since 2009 has been further developed through the Eastern Partnership, a joint initiative between the EU and Armenia, Azerbaijan, Belarus, Georgia, the Republic of Moldova and Ukraine. Support to youth is identified within the Regional East Strategy Paper for the use of European Neighbourhood Instrument (ENI) funding for the period Youth support falls under support to the civil society and to people-to-people contacts, underlining the need to develop dialogue and exchanges between youth and to strengthen the capacity of youth organisations. As stated above, youth is one of the main focuses of the 2015 ENP Review. Lack of opportunity, particularly for youth, is considered to be one of the roots of instability, vulnerability and radicalisation. Social inclusion and participation in decision making, together with economic development and the prospects for youth, especially with regards to employment and employability, are highlighted as a key to stabilise societies in the Neighbourhood. Therefore, the ENP will mobilise a determined effort to support countries in improving prospects for the local population, in order to help the region becoming a place where young people want to build their future. 10 European Commission White Paper "A New Impetus for European Youth", COM(2001)681, Council Resolution of 27 November 2009, Official Journal of the European Union, C311, Council Recommendation of 22 April 2013 on establishing a Youth Guarantee (2013/C 120/01) 13 Launched in July 2013 with a joint declaration by the European Social Partners (ETUC, BusinessEurope, UEAPME and CEEP), the European Commission and the Presidency of the Council of the EU; see also Council Declaration, 18 Oct Commission Implementing Decision C(2014)5200 of adopting a Strategy Paper and Multiannual Indicative Programme for Regional East. [6]

134 The 2015 ENP Review also recognises the importance of the link between advancing support for youth and increased civic engagement. Supporting professionalization and leadership in the EaP youth activism is seen as a stepping stone per se and is crucial for the sustainability of capacity building development targeting civil society. Therefore the EU committed to establishing Civil Society Fellowships engaging young men and women. 1.3 Stakeholder analysis Key stakeholders include inter alia: Public or private organisations and civil society organisations for which youth is a primary target group or which activities address key challenges of young people: youth workers, youth centres, advice centres for youth, youth councils on national and subnational level, youth organisations or youth-led organisations, charity organisations, businesses, business associations, social partners, training providers, employment services, professional organisations and trade unions; other organisations focussing on sports and cultural activities. Schools and educational institutions, out-of-school educational establishments, Vocational education and training (VET) centres; Relevant national, regional and local authorities. Key target groups include inter alia: Young men and particularly young women; Low achievers, early school leavers, young not in education, employment and training (NEETs); Disadvantaged youth; Young leaders and entrepreneurs; Youth organisation and youth workers. The information available points out that those institutions dealing with youth issues often have insufficient capacity and know-how to develop appropriate responses or to engage with other actors. That predominantly applies to youth organisations but also to public authorities (e.g. employment services, local authorities) which often lack experience to put in place youthspecific measures. Moreover, actions developed to target youth are of very fragmented nature and it takes a cross-sectorial approach which is indispensable to achieve results in such complex area. 1.4 Priority areas for support Building on the above information, the new EU4Y programme should aim to provide support in the following three key areas: 1) Support to young people employability and active participation in society: [7]

135 Empower youth with skills supporting their active participation in economy, society and developing their entrepreneurial potential in its broader sense 15 ; Increase youth organisations' expertise and capability to become important actors in policy developments on national, regional and local level in particular regarding youth issues; Create a generation of young leaders capable to develop constructive relations with public and private bodies; advance the interest of their local communities and act as responsible future leaders; Promote entrepreneurship education and social entrepreneurship among young people; Support skills development through non-formal training and practical experiences. Develop skills matching labour market needs. 2) Strengthening youth employment opportunities: Support creative young people in maturing their entrepreneurial ideas and equipping them with skills to look for appropriate implementation schemes and funding; Encourage broader policy dialogue and actions to promote cross-sectorial approaches for youth and streamlining youth at national level. A particular focus will be devoted to youth employment issues; Include the private sector to foster the creation of jobs and potential investment strategies. Support to national policies for an improved regulatory framework, inclusive and favourable environment. 3) Reach-out to disadvantaged youth 16 : Address the main challenges for disadvantaged young people (e.g. increasing their educational, training and/or employment opportunities) by awarding funds to the development of ideas potentially having a systemic impact in this area; Streamline support to disadvantages youth in all the actions of the EU4Y; Promote the inclusion of young women in all the proposed activities, with the final objective of achieving gender balance. 4) Ensure inter-relation and mutual support among all the activities of the EU4Y programme and beyond: Ensure synergies with existing policies addressing youth 17 ; Ensure coordination among the EU4Y components, and support monitoring and visibility for the entire programme; 15 See footnote See definition in footnote See EU Policy Framework [8]

136 Explore links and additional opportunities with other projects and initiatives, in particular those financed by the EU. 2 RISKS AND ASSUMPTIONS Risks Risk level Mitigating measures Regional instability. Recent events have shown that there is a potential for instability in the EaP region, including in external relations involving partner countries. An escalation of such trends in one or more partner countries can have an impact on the delivery of the programme. Medium/High Throughout the implementation of the programme, the political situation will be regularly monitored, in order to be able to adapt efforts to changing circumstances. The level of commitment is low among the EaP national and local institutions. This may lead to low participation from the EaP institutions in the activities promoted by this action. Difficulties in reaching key target groups. Particularly in the case of certain disadvantaged groups, a considerable degree of isolation from mainstream social engagement can be seen, and this affects the information flow to these young people and their ability to make their voices heard. In this sense, the risk is that the programme will not be able to involve these key beneficiaries into its activities. Uneven participation across the region and within countries. Variations in the capacity and commitment of authorities and civil society organisations across the region may lead to an uneven pattern of participation. Low/Medium High Medium Youth employment and employability is high on the agenda of most EaP countries. Through the various capacity building activities, the implementing partners will ensure the participation of as many public officials as possible, also through the direct involvement of the EU Delegations. The programme focuses specifically on engaging with disadvantaged youth and on promoting local/regional partnerships involving key stakeholders who have experience in targeting these issues in all its activities. A whole component of this action is dedicated to these beneficiaries. All the actions will have the aim to support young people coming from disadvantaged background. That includes capacity building actions of organisations located in these areas which should support more engagement within the given country. Furthermore, the [9]

137 implementing partners, with the overall monitoring and coordination (component 4 of the action) and through the active involvement of the EU Delegations, will ensure equal access and opportunities to all participants in ensuring also that the capacity of NGOs and their associated needs for capacitybuilding are effectively addressed. That should also take into account the participation levels of the different countries. This should be also addressed through the fact that reporting on the activities to the steering committee as well as to the higher political fora (e.g. corresponding Panel) will include information regarding engagement of all the regions and localities. Shrinking space for civil society operation in some of the EaP countries, in particular Azerbaijan. Assumptions Medium/High There is some degree of political stability in the region; A tailor-made approach will be sought together with the EACEA when it comes to the implementation of the Civil Society Fellowships, according to the situation on the ground in the various EaP countries. Public authorities consider that investing in youth employment and employability is a strategic priority, that youth involvement in policy-making brings an added-value, especially in those policy areas in which young people are directly concerned; Key stakeholders, notably private sector, can be mobilised if interested in partnerships; Youth organisations are interested in engaging in policy dialogue and/or in youth projects and initiatives; It is possible to reach out to disadvantaged youth and enable them to take part in the activities of the action; [10]

138 Public institutions are willing to engage in discussions to implement projects with potential systemic impact. The action will be closely monitored in all its phases, not only through the steering committee supported by component 3 in its monitoring and coordination functions but also by exploring linkages with discussions in relevant Eastern Partnership Platforms and Panels. 3 LESSONS LEARNT, COMPLEMENTARITY AND CROSS-CUTTING ISSUES 3.1 Lessons learnt This programme builds on the Eastern Partnership Youth Window (EPYW) under the Youth in Action Programme ( ) which offered non-formal learning opportunities to young people enhancing their skills, competences and active participation in society, through European Voluntary Service, Youth exchanges and training and networking. Out of the EPYW's total budget EUR 31.5 million over the period allocated from the European Neighbourhood and Partnership Instrument (ENPI), EUR 19 million were managed and implemented at national level by the Youth in Action National Agencies (NAs), while the remaining third (EUR 12.5 millions) were managed and implemented at central level by the Education, Audio-visual and Culture Executive Agency (EACEA). In terms of results achieved, NAs funded projects, while the EACEA granted 465 projects submitted by youth organisations from EaP countries. The projects involved about young people and youth workers. An important number of young people were involved in several projects 18 : 56% at national level, with 48.76% participation of young women. 44% at central level, with 47.87% participation of young women. The demand under the EPYW was high: all funds were used, demonstrating high interest and demand at all levels (NAs/EACEA). The results and recommendations of the evaluation of the EPYW pointed out that the programme has addressed some of its planned objectives. The EPYW was most useful inter alia in: supporting young people s needs in the areas of participation and active citizenship, intercultural learning and mobility, employability and empowerment; strengthening civil society; and legitimising youth work and youth policy as credible and important sectors of civil society. 18 According to the evaluation Final Report: "In total 37,247 young people and youth workers participated in all activities ( ). According to the information gathered through the online survey, it can be assumed that around one third (35%) EPYW project participants have participated only in one project (EVS or Youth Exchange or Training & Networking) while the other two thirds (65%) have participated in two and more (some up to 11) projects during the life time of the programme. In average each individual contributing as a participant in the survey (713) has participated in 3-4 projects. This suggests that the actual number of young people and youth workers who participated in EPYW funded projects is between and ". [11]

139 The centralised method of implementation has been clearly indicated by the beneficiaries as the preferred one (also for future co-operation). Some challenges were also identified: 1) The number of disadvantaged young people directly reached was lower than expected. 2) Regional co-operation was not perceived by beneficiaries as an important priority. 3) Monitoring, communication, visibility and coordination with other EU or non EU programmes targeting youth have not been carried out in the best way. 4) The EPYW s short-term character affected the sustainability of result. Apart from the evaluation of the EPYW, this Action builds also on key recommendations for the EU Member States resulting from the 2 nd Eastern Partnership Youth Forum. These call for the promotion of the local and regional dimensions of youth activities, by focusing the assistance on disadvantaged youth from the EaP region, and by setting up a mechanism for closer monitoring of the impact of these activities. In addition, the final conference of the Eastern Partnership Youth Regional Unit technical assistance ( ) took place in November 2015 and presented the main findings of the EaP Youth Policy Report, which provided the state of play regarding youth policy in each EaP country, also identifying recommendations for future progress in the design, implementation and monitoring of youth policy. It is also worth mentioning that the Small Business Act 2016 assessment in the EaP concluded that more developed support for youth entrepreneurship through education and training, as well as non-formal mentoring by the business community will be essential in building a more entrepreneurial economy. Entrepreneurship training for young entrepreneurs (men and women) must be dove-tailed with access to finance requiring a more joined-up policy conversation between education, business and the banking communities. 3.2 Complementarity, synergy and donor coordination The actions in the field of youth in the EaP are many and a mapping of all current initiatives in this sector would be necessary. According to current information, co-ordination and co-operation with the below programmes and institutions will be particularly important with parallel insurance of proper information and follow-up on policy level. Erasmus + Programme ( ) Complementarity with the current Erasmus+ Programme 19 will be sought. The Erasmus+ Programme is the EU programme to support education, training, youth and sport in Europe. Its budget of EUR 14.7 billion provide opportunities for more than 4 million European to study, train, volunteer and gain experience abroad. 10% of the budget is allocated to youth non-formal learning activities. This includes also youth cooperation with partner countries neighbouring the 19 E+ is the result of the integration of the Erasmus+ Programme ( ) with the following European programmes during the period : the Lifelong Learning Programme, the Youth in Action Programme, the Erasmus Mundus Programme, Tempus, Alfa, Edulink, and programmes of cooperation with industrialised countries in the field of higher education. [12]

140 EU, including EaP countries. Erasmus+ National Agencies are entitled to use up to 25% of funds allocated to Erasmus+ Key Action 1 Mobility projects for young people and youth workers for projects involving cooperation with partner countries neighbouring the EU, including EaP countries. Directorate-General Education and Culture of the European Commission (DG Education and Culture) ensures good tracking of resources used under the European Neighbourhood Instrument (Heading IV) in order to facilitate the monitoring and evaluation of results. Co-operation with Erasmus + bodies focusing on monitoring, such as EACEA and the SALTO Youth Eastern Europe and Caucasus Resource Centre (SALTO EECA) 20, will be of particular importance. The SALTO EECA's information, support and training activities in the EaP region have played an important role in ensuring the quality of youth projects implemented in the region. These activities came in addition to the information sessions organised and run in each EaP country by the EACEA as a means of promoting the previous Eastern Partnership Youth Window. European Training Foundation The European Training Foundation (ETF) is an EU agency that helps transition and developing countries to harness the potential of their human capital through the reform of education, training and labour market systems, and in the context of the EU's external relations policy. The expertise of ETF in facilitating the reform of vocational education and training and employment systems in partner countries could be extremely useful within the scope of the EU4Y. This is why the Commission will propose in its Opinion on the ETF Programming Document ( ) to include activities to support development of cross-sectoral youth policies focusing on youth employment. To ensure alignment between the programme and ETF actions ETF will be invited to take part to the EU4Y steering committee. Council of Europe Coordination will also be ensured with the Council of Europe (CoE). As a partner of the Commission in the field of youth in the EU-CoE youth partnership, the CoE has organised several seminars on youth participation and well-being and on youth policy in Eastern Europe and Caucasus ( ). The EU-CoE Youth Partnership also offers youth policy training courses on the basis of a youth policy manual. Whilst the CoE will not organise activities in the EaP countries in 2016, participants from the region will be invited to take part in the CoE activities 21. Beyond the EU-CoE youth partnership, the CoE Youth Department will also organise SALTO EECA currently located within the Polish National Agency Foundation for Development of Education System (FDES) which also deals with the etwinning National Support Service (NSS), within the etwinning Plus Programme. Symposium Unequal Europe to discuss inequalities in education and training systems, in the labour market, in access to rights and social benefits; 6th workshop on the history of youth work on the history of political participation and youth work. [13]

141 a broad number of activities with participants from the EaP countries, with the support of the CoE European Youth Foundation 22, amongst others. Moreover, the CoE signed a new framework agreement with the Ministry of Youth and Sport of Ukraine for the period The agreement focuses on trainings in the fields of youth policy development and capacity-building, human rights, education and youth participation. It also calls for support to confidence-building and conflict-transformation measures. The programme has run since 2012 and has been funded mostly through voluntary contributions. As a follow-up to the agreed action plan, the European Youth Foundation also opened a special call for pilot projects in Ukraine. The Framework Programme on Co-operation in the field of Youth Policy is part of the CoE Action Plan on Ukraine. International organisations Coordination with other international organisations - in particular the United Nations (UN) (i.e. the UN Youth Envoy), the International Labour Organisation (ILO), the United Nations Development Programme (UNDP) and the World Bank (WB) shall be sought. This will include inviting relevant representatives to events, and sharing relevant information with them to promote greater synergies. At project level, inspiration will be sought from similar initiatives. Of particular interest is the UNDP-EU project in Armenia implemented by Kolba Innovation Lab and called Inno4Dev Innovation for Development. The project entails a social venture incubator, aiming at reducing the distance between citizens and authorities, and to increase citizens engagement on common social challenges. The overall purpose of this project is to turn citizens into solvers of development problems and its modalities are easily adaptable to other contexts. Another example of initiative in the field of youth where possible synergies can be sought is the ongoing project "EU-OECD Youth Inclusion'' 23 funded by DEVCO and implemented in Moldova. It aims at better responding to the needs and aspirations of young people through evidence-based policies and strengthening their involvement in national development processes. This project will analyse the indicators to measure youth well-being deficits. A global methodology and toolkit will be developed to assist countries in implementing and strengthening youth inclusion strategies Linkages with political dialogue Last but not least, the implementation of this programme and all its actions at project level shall be complemented by policy dialogue at Platforms and Panels level. The EaP Platform 4 22 "The European Youth Foundation [ ] is an establishment of the Council of Europe [aiming] to promote youth co-operation in Europe by providing financial support to such European youth activities as serve the promotion of peace, understanding and co-operation between the people of Europe and of the world, in a spirit of respect for human rights and fundamental freedoms" (Article 1 of the Statutes of the European Youth Foundation). 23 DCI-HUM/2013/ , website: [14]

142 "People-to-people contacts" and Platform 2 Economic integration & convergence with EU policies are particularly relevant for monitoring the results of this programme and its actions. The Directorate General for Education and Culture chairs Platform 4, which regularly brings together senior officials in charge of education, training, research, youth and culture policies, as well as other actors from civil society. On 15 June 2015, youth was the main topic of Platform 4. Platform 2 is chaired by the Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs, and discusses topics important from the employment related aspects of this programme. The foreseen Panel on Youth Employment and Employability, currently under discussion, would further support this action and complementarity would have to be sought. Furthermore, the action should feed into the EaP Youth Forum and other relevant events. 3.3 Cross-cutting issues The EU4Y will contribute to the goal of good governance, through the inclusion of a broad range of societal stakeholders in the activities of the projects and the promotion of active participation among young people in community-based projects. This action will bring also a significant number of young people closer to youth-related policy making processes at local, regional and national level. This programme will also foster respect for cultural diversity and intercultural learning. Facilitating joint activities of young people from different cultural, ethnic and religious backgrounds will also be addressed. Gender is identified as a priority and key cross-cutting theme. Young women in the region face negative gender stereotypes on how they should be and which roles they should play in society. At the same time, young men face masculine stereotypes that have a negative impact on, for example, their level of education. The EU4Y will address such priorities through i) actions targeting young women directly and by identifying young women as one of the target groups; ii) aiming at gender balance at the level of participants to the various EU4Y actions. Disadvantaged youth 24, will be addressed in all the actions of the programme, as well as specifically under component 2. Environmental sustainability, including climate change mitigation, may be included as a theme in community-based activities under the Grant component. 4 DESCRIPTION OF THE ACTION 4.1 Objectives/results The objective of the EU4Youth programme is to foster the employability and the active participation of young people in society and economy, by developing skills needed in the labour market and by supporting them in becoming leaders and entrepreneurs, by facilitating transition and the search for new professional opportunities. Advancing cross-sectorial youth 24 See definition in footnote 4. [15]

143 policies will be supported through better capacity of youth organisations to engage in policy development and to build constructive relations with public and private bodies. Furthermore, the action will aim to support efforts for the development of broad partnerships bringing together relevant authorities, with other key stakeholders, like businesses, social partners, vocational education and training (VET) providers, employment services, youth representatives.particular attention will be devoted to disadvantaged youth and to the inclusion of women. More specifically: Component 1 This component will empower young people with key competences and skills supporting their active participation in democratic life and the labour market. Capacity building activities will focus on skills and competencies crucial for developing entrepreneurial potential, leadership and active participation in social and economic life. Component 2 This component will aim to increase educational opportunities and employment perspectives for all youth. Particularly, challenges faced by disadvantaged youth and in the field of entrepreneurship will be addressed by a grant scheme for those organisations active in these areas, aiming to identify actions with significant potential for systemic impact 25. Component 3 This component will ensure the effective overall functioning, coordination and visibility of the programme. In addition, it will support the alignment of the EU4Y with relevant policy dialogues and actions. 4.2 Main Activities The activities will be structured into 3 components: 1. EU4Y Capacity building a. Civil Society Fellowships EACEA b. Partnerships for Entrepreneurship EACEA 2. EU4Y Grant scheme a. Grant scheme for policy development with a focus on youth entrepreneurship and disadvantaged youth 3. EU4Y Coordination a. Monitoring Coordination - Visibility b. Alumni Network for "Fellows" c. Support EU4Y alignment with other policy dialogue/actions d. Synergies with other programmes 25 Such activities should aim at producing effects that go beyond supporting the single applicant and trigger a larger effect with a potential systemic impact and inspire reforms at national level. [16]